# Question

The market portfolio has an expected return of 12 percent and a standard deviation of 22 percent. The risk-free rate is 5 percent.

a. What is the expected return on a well-diversified portfolio with a standard deviation of 9 percent?

b. What is the standard deviation of a well-diversified portfolio with an expected return of 20 percent?

a. What is the expected return on a well-diversified portfolio with a standard deviation of 9 percent?

b. What is the standard deviation of a well-diversified portfolio with an expected return of 20 percent?

## Answer to relevant Questions

A portfolio that combines the risk-free asset and the market portfolio has an expected return of 7 percent and a standard deviation of 10 percent. The risk-free rate is 4 percent, and the expected return on the market ...There are two stocks in the market, Stock A and Stock B. The price of Stock A today is $75. The price of Stock A next year will be $64 if the economy is in a recession, $87 if the economy is normal, and $97 if the economy is ...In contrast to the CAPM, the APT does not indicate which factors are expected to determine the risk premium of an asset. How can we determine which factors should be included? For example, one risk factor suggested is the ...You are forming an equally weighted portfolio of stocks. Many stocks have the same beta of .84 for Factor 1 and the same beta of 1.69 for Factor 2. All stocks also have the same expected return of 11 percent. Assume a ...Miller Manufacturing has a target debt–equity ratio of .55. Its cost of equity is 14 percent, and its cost of debt is 7 percent. If the tax rate is 35 percent, what is Miller’s WACC?Post your question

0