Question: What changes would you expect in the standard deviation for
What changes would you expect in the standard deviation for a portfolio of between 4 and 10 stocks, between 10 and 20 stocks, and between 50 and 100 stocks?
Answer to relevant QuestionsThe capital asset pricing model (CAPM) contends that there is systematic and unsystematic risk for an individual security. Which is the relevant risk variable and why is it relevant? Why is the other risk variable not ...Draw an ideal SML. Based on the early empirical results, what did the actual risk-return relationship look like relative to the ideal relationship implied by the CAPM?Based on five years of monthly data, you derive the following information for the companies listed:a. Compute the beta coefficient for each stock.b. Assuming a risk-free rate of 8 percent and an expected return for the ...The small-firm effect refers to the observed tendency for stock prices to behave in a manner that is contrary to normal expectations. Describe this effect and discuss whether it represents sufficient information to conclude ...Exhibit demonstrated how the Fama-French three-factor and four-factor models could be used to estimate the expected excess returns for three stocks (MSFT, CSX, and XRX). Specifically, using return data from 2005–2009, the ...
Post your question