Business, 06.08.2019 02:20 ktyree100

Stock x has a beta of 0.7 and stock y has a beta of 1.3. the standard deviation of each stock's returns is 20%. the stocks' returns are independent of each other, i. e., the correlation coefficient, r, between them is zero. portfolio p consists of 50% x and 50% y. given this information, which of the following statements is correct?
a) portfolio p has the same required return as the market (rm).b) portfolio p has a beta of 1.0 and a required return that is equal to the riskless rate, rrf. c) the required return on portfolio p is equal to the market risk premium (rm−rrf).d) portfolio p has a beta of 0.7.

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 16:30

What comprises a list of main points and sub-points of a topic to include in a presentation

Answers: 2

Answer

Business, 22.06.2019 10:10

At the end of year 2, retained earnings for the baker company was $3,550. revenue earned by the company in year 2 was $3,800, expenses paid during the period were $2,000, and dividends paid during the period were $1,400. based on this information alone, retained earnings at the beginning of year 2 was:

Answers: 1

Answer

Business, 22.06.2019 10:40

Two assets have the following expected returns and standard deviations when the risk-free rate is 5%: asset a e(ra) = 18.5% σa = 20% asset b e(rb) = 15% σb = 27% an investor with a risk aversion of a = 3 would find that on a risk-return basis. a. only asset a is acceptable b. only asset b is acceptable c. neither asset a nor asset b is acceptable d. both asset a and asset b are acceptable

Answers: 2

Answer

Business, 22.06.2019 17:30

Emery pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. emery uses 825 pounds per month of the chemical, estimates the holding cost to be 50% of the purchase price (because of spoilage), and estimates order costs to be $48 per order. the cost schedules of two suppliers are as follows: vendor 1 vendor 2 quantity price/lb quantity price/lb 1-499 $17 1-399 $17.10 500-999 $16.75 400-799 $16.85 1000+ $16.50 800-1199 $16.60 1200+ $16.25 (a) what is the economic order quantity for each supplier? (b) what quantity should be ordered and which supplier should be used? (c) the total cost for the most economic order sire is $

Answers: 2

Answer

You know the right answer?

Stock x has a beta of 0.7 and stock y has a beta of 1.3. the standard deviation of each stock's retu...

Questions