Question
Stock A has an expected return of 12%, a standard deviation of 24% on its returns,...
Stock A has an expected return of 12%, a standard deviation of 24% on its returns, and a beta of 1.2. Stock B has an expected return of 15%, a standard deviation of 30% on its returns, and a beta of 1.5. The correlation between the two stocks is 0.8. If we invested $30,000 in Stock A and $20,000 in Stock B, what is the beta of our portfolio?
Select one:
a. 1.03
b. 1.25
c. 1.32
d. 1.40
e. 1.56
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
Stock A has an expected return of 13% and a standard deviation of 22%, while Stock...
Stock A has an expected return of 13% and a standard deviation
of 22%, while Stock B has an expected return of 15% and a standard
deviation of 25%. If an investor is less risk-averse, they will be
likely to choose…
A. Stock A
B. Stock B
Stock A has a beta of 1.8 and an expected return of 12%. Stock B
has a beta of 0.7 and an expected return of 7%. If the risk-free
rate is 2% and...
Stocks A and B each have an expected return of 12%, a beta of 1.2, and...
Stocks A and B each have an expected return of 12%, a beta of
1.2, and a standard deviation of 25%. The returns on the two stocks
have a correlation of 0.6. Portfolio P has 50% in Stock A and 50%
in Stock B. Which of the following statements is CORRECT?
*Explain*
a. Portfolio P has a beta that is greater than 1.2.
b. Portfolio P has a standard deviation that is greater than
25%.
c. Portfolio P has an...
The standard deviation of a stock’s returns is 24% and the correlation of its returns with...
The standard deviation of a stock’s returns is 24% and the
correlation of its returns with the returns of the market portfolio
is 0.4. The standard deviation of the returns of the market
portfolio is 16%. The expected return of the market portfolio is
11% and the risk-free rate of return is 3%. The stock is currently
priced at $45 and you expect the price to be $50 in one year. The
stock is not expected to pay any dividends...
Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard...
Stock X has a 10% expected return, a beta coefficient of 0.9,
and a 35% standard deviation of expected returns. Stock Y has a
12.5% expected return, a beta coefficient of 1.2, and a 25%
standard deviation. The risk-free rate is 6%, and the market risk
premium is 5%.
a. Calculate each stock’s coefficient of variation.
b. Which stock is riskier for a diversified investor?
c. Calculate each stock’s required rate of return.
d. On the basis of the two...
Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard...
Stock X has a 10% expected return, a beta coefficient of 0.9,
and a 35% standard deviation of expected returns. Stock Y has a
12.5% expected return, a beta coefficient of 1.2, and a 25%
standard deviation. The risk-free rate is 6%, and the market risk
premium is 5%.
a. Calculate each stock’s coefficient of variation.
b. Which stock is riskier for a diversified investor?
c. Calculate each stock’s required rate of return.
d. On the basis of the two...
Stock 1 has a expected return of 14% and a standard deviation of 12%. Stock 2...
Stock 1 has a expected return of 14% and a standard deviation
of 12%.
Stock 2 has a expected return of 11% and a standard deviation
of 11%.
Correlation between the two stocks is 0.5.
Create a minimum variance portfolio with long positions in both
stocks.
What is the return on this portfolio?
Stock X has an expected return of 12% and the standard deviation of the expected return...
Stock X has an expected return of 12% and the standard deviation
of the expected return is 20%. Stock Z has an expected return of 7%
and the standard deviation of the expected return is 15%. The
correlation between the returns of the two stocks is +0.3. These
are the only two stocks in a hypothetical world. What is the
expected return and the standard deviation of a portfolio
consisting of 80% Stock X and 20% Stock Z?
Will any...
Stock X has an expected return of 12% and the standard deviation of the expected return...
Stock X has an expected return of 12% and the standard deviation
of the expected return is 20%. Stock Z has an expected return of 7%
and the standard deviation of the expected return is 15%. The
correlation between the returns of the two stocks is +0.3. These
are the only two stocks in a hypothetical world.
What is the expected return and the standard deviation of a
portfolio consisting of 80% Stock X and 20% Stock Z? Will any...
True or False? -- Stock A has an expected return of 7% and a standard deviation...
True or False? -- Stock A has an expected return of 7%
and a standard deviation of 8%. Stock B has an expected return of
9% and a standard deviation of 10%. If the portfolio that consists
of 50% stock A and 50% stock B has a standard deviation of 8%, the
correlation coefficient of stocks A and B must be 0.88.
Stock ABC has a beta of 1.4 and the standard deviation of its returns is 30%....
Stock ABC has a beta of 1.4 and the standard deviation of its
returns is 30%. The market risk premium is 5% and the risk-free
rate is 3%.
What is the expected return for the stock?
What are the expected return and standard deviation for a
portfolio that is equally invested in the stock and the risk-free
asset?
If you forecast that next year stock ABC will have return of
10%. Would you buy it? Why or why not?
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 5 minutes ago
asked 16 minutes ago
asked 22 minutes ago
asked 22 minutes ago
asked 32 minutes ago
asked 38 minutes ago
asked 44 minutes ago
asked 48 minutes ago
asked 50 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 2 hours ago