Business

Business, 21.11.2019 00:31, Dragonskeld

Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock a, and a defensive stock d. a. find the beta of each stock. in what way is stock d defensive

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Business, 31.10.2019 00:31, sonykorah7279

Stock a has a beta of 0.8, stock b has a beta of 1.0, and stock c has a beta of 1.2. portfolio p has 1/3 of its value invested in each stock. each stock has a standard deviation of 25%, and their returns are independent of one another, i.e., the correlation coefficients between each pair of stocks is zero. assuming the market is in equilibrium, which of the following statements is correct? a. portfolio p's expected return is equal to the expected return on stock a.b. portfolio p's expected return is less than the expected return on stock b.c. portfolio p's expected return is equal to the expected return on stock b.d. portfolio p's expected return is greater than the expected return on stock c.e. portfolio p's expected return is greater than the expected return on stock b.

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Business, 02.11.2019 04:31, AshIeigh

Highly risk-averse investor is considering adding one additional stock to a 3-stock portfolio, to form a 4-stock portfolio. the three stocks currently held all have b = 1.0, and they are perfectly positively correlated with the market. potential new stocks a and b both have expected returns of 15%, are in equilibrium, and are equally correlated with the market, with r = 0.75. however, stock a's standard deviation of returns is 12% versus 8% for stock b. which stock should this investor add to his or her portfolio, or does the choice not matter?

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Business, 05.11.2019 03:31, americus777oz2aze

Stock a has a beta of 0.8, stock b has a beta of 1.0, and stock c has a beta of 1.2. portfolio have 1/3 of its value invested in each of these stocks. each stock has a standard deviation of 25%, and their returns are independent of one another, ie., the correlation coefficients between each pair of stock is zero. assuming the market is in equilibrium, which of the following statements is correct? a. portfolio p's expected return is greater than the expected return on stock c.b. portfolio p's expected return is greater than the expected return on stock bc. portfolio p's expected return is equal to the expected return on stock ad. portfolio p's expected return is less than the expected return on stock be. portfolio p's expected return is equal to the expected return on stock b.

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Business, 27.11.2019 04:31, Oliviapuffinburger33

Consider the following two scenarios for the economy and the returns in each scenario for the market portfolio, an aggressive stock a, and a defensive stock d. rate of return (%) scenario scenario bust: market -7 / aggressive stock a -9 / defensive stock d -5 boom: market 28 / aggressive stock a 35 / defensive stock d 20 a) find the beta of each stock. in what way is stock d defensive? b) if each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c) if the t-bill rate is 4%, what does the capm say about the fair expected rate of return on the two stocks? d) which stock seems to be a better buy on the basis of your answers to (a) through (c)?

Answers: 3

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