1- Define the following terms, using graphs or equations to illustrate your answers wherever feasible: (A) Portfolio:...

Question:

1- Define the following terms, using graphs or equations to illustrate your answers wherever feasible:

(A) Portfolio: Feasible set: Effeiciant protfolio: Efficient Frontier

(B) Indifference Curve, optimal porforlio

(D) Characteristic line; beta coefficient, b

( e) Arbitrage Pricing Theory (APT)

An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The ristk free rate is 6%, the expected return on the first factor (r1) is 12%, and the expected return on the second factor (r2) is 8% If bi1+ 0.7 and bi2=0.9 what is Crispt's required return?

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...