Assume the return on a market index represents the common factor and all stocks in the economy have a beta of 1. firm-specific returns all have a standard deviation of 33%.
suppose an analyst studies 20 stocks and finds that one-half have an alpha of 3.1%, and one-half have an alpha of –3.1%. the analyst then buys $1.3 million of an equally weighted portfolio of the positive-alpha stocks and sells short $1.3 million of an equally weighted portfolio of the negative-alpha stocks.
a. what is the expected return (in dollars), and what is the standard deviation of the analyst’s profit?

Which of the following statements is true regarding the definition of a fund? a fund is a fiscal entity which is designed to provide reporting that demonstrates conformance with finance-related legal and contractual provisions separately from gaap reporting. a fund exists to assist in carrying on activities and attaining objectives where there are no specific rules or restrictions. a fund is an accounting entity which is designed to enable reporting in conformity with gaap without being restricted by legal or contractual provisions. a fund is a mechanism developed to provide accounting for revenues and expenditures that are subject to certain restrictions separate from revenues and expenditures that are not subject to restrictions.

Uestion 7 you hold a portfolio consisting of a $5,000 investment in each of 20 different stocks. the portfolio beta is equal to 1.12. you have decided to sell a coal mining stock (b = 1.00) at $5,000 net and use the proceeds to buy a like amount of a mineral rights company stock (b = 2.00). what is the new beta of the portfolio?

Which alternative accounting method allows farmers to record expenses and incomes in the year in which they sell their yield? gaap allows for the method, which permits farmers to subtract the expenses of producing the crop in the year in which they sell the yield and earn the revenue.