Question
In: Finance
stock a has a beta of 1.6 and a standard deviation of 25%. stock b has...
stock a has a beta of 1.6 and a standard deviation of 25%. stock b has a beta of 1.4 and a standard deviation of 20%. portfolio ab was created by investing in a combination of stocks a and b. portfolio ab has a beta of 1.25 and a standard deviation of 18%. which of the following statements is correct?
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Stock A has more market risk than Portfolio AB. |
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Stock A has more market risk than Stock B but less stand-alone risk. |
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Portfolio AB has more money invested in Stock A than in Stock B. |
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Portfolio AB has the same amount of money invested in each of the two stocks. |
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Portfolio AB has more money invested in Stock B than in Stock A. |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Suppose Intel stock has a beta of 1.6, whereas Boeing stock has a beta of 1....
Suppose Intel stock has a beta of 1.6, whereas Boeing stock has
a beta of 1. If the risk-free interest rate is 4% and the expected
return of the market portfolio is 10%, according to the CAPM,
What is the expected return of Intel stock?
What is the expected return of Boeing stock?
What is the beta of a portfolio that consists of 60% Intel
stock and 40% Boeing stock?
What is the expected return of a portfolio that consists...
The standard deviation of stock A is .60, while the standard deviation of stock B is...
The standard deviation of stock A is .60, while the standard
deviation of stock B is .80. If the correlation coefficient for A
and B is positive, then a portfolio that consists of 50% of stock A
and 50% of stock B MUST have a standard deviation _________. Assume
no short selling allowed.
a) Less than 0.5
b) Greater than 0.7
c) Greater than 0.5
d) Less than 0.6
e) Not enough information
The standard deviation of the market index portfolio is 10%. Stock A has a beta of...
The standard deviation of the market index portfolio is 10%.
Stock A has a beta of 2 and a residual standard deviation of
20%.
A) calculate the total variance for an increase of .10 in its
beta.
B) calculate the total variance for an increase of 1% in its
residual standard deviation.
A stock has an expected return of 1%, a beta of 1.3, and a standard deviation...
A stock has an expected return of 1%, a beta of 1.3, and a
standard deviation of 19%. The risk-free rate is 4.5%. What is the
market risk premium?
5.77%
6.11%
5.11%
4.79%
4.29%
The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.00,...
The standard deviation of the market-index portfolio is 20%.
Stock A has a beta of 2.00, and a residual standard deviation of
30%.
a.Calculate the total variance for increase of 0.10 in its
beta.
b.Calculate the total variance for an increase of 2.62% in its
residual standard deviation.
(Do not round intermediate calculations. Round your answers to
the nearest whole number.)
The standard deviation of the market-index portfolio is 45%. Stock A has a beta of 1.20...
The standard deviation of the market-index portfolio is 45%.
Stock A has a beta of 1.20 and a residual standard deviation of
55%.
a. Calculate the total variance for an increase of
0.20 in its beta. (Do not round intermediate calculations.
Round your answer to 4 decimal places.)
b. Calculate the total variance for an increase of
8.86% in its residual standard deviation. (Do not round
intermediate calculations. Round your answer to 4 decimal
places.)
I got .6994 for both...
Stock A has an expected return of 5% and standard deviation of 10%. Stock B has...
Stock A has an expected return of 5% and standard deviation of
10%. Stock B has an expected return of 10% and standard deviation
of 15%. The correlation between the two stocks’ returns is
0.70. If you wanted to form a portfolio of these
two stocks and wanted that portfolio to have an expected return of
8%, what weights would you put on each stock? Show your work
(“algebra”). What would be the
standard deviation of this portfolio?
Stock A has an expected return of 15% and a standard deviation of 26%. Stock B...
Stock A has an expected return of 15% and a standard deviation
of 26%. Stock B has an expected return of 15% and a standard
deviation of 12%. The risk-free rate is 4% and the correlation
between Stock A and Stock B is 0.5. Build the optimal risky
portfolio of Stock A and Stock B. What is the standard deviation of
this portfolio? Round answer to 4 decimal places
Stock A has an expected return of 15% and a standard deviation of 26%. Stock B...
Stock A has an expected return of 15% and a standard deviation
of 26%. Stock B has an expected return of 15% and a standard
deviation of 12%. The risk-free rate is 4% and the correlation
between Stock A and Stock B is 0.5. Build the optimal risky
portfolio of Stock A and Stock B. What is the standard deviation of
this portfolio?
Stock A has an expected return of 20% and a standard deviation of 28%. Stock B...
Stock A has an expected return of 20% and a standard deviation
of 28%. Stock B has an expected return of 14% and a standard
deviation of 13%. The risk-free rate is 6.6% and the correlation
between Stock A and Stock B is 0.2. Build the optimal risky
portfolio of Stock A and Stock B. What is the expected return on
this portfolio?
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