You own $15,500 of AAPL, $9,000 of TSLA, and $7,000 of DIS. These stocks have betas of
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Question:
You own $15,500 of AAPL, $9,000 of TSLA, and $7,000 of DIS. These stocks have betas of 2, 1.1, and 0.3, respectively. Assume the market return will be 7% and the risk-free rate is 3%. Compute the risk premium for following
- the market (as percent, e.g. 10.25 for 10.25%)
- AAPL (as percent, e.g. 10.25 for 10.25%)
- TSLA (as percent, e.g. 10.25 for 10.25%)
- DIS (as percent, e.g. 10.25 for 10.25%)
- the portfolio
Expert Answer:
To compute the risk premium for the market and individual stocks well use the following formula Risk ... View the full answer
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Financial reporting, financial statement analysis and valuation a strategic perspective
ISBN: 978-0324789416
7th Edition
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
Posted Date:
