Question: (a)Explain and present an example for how one uses a price multiple to value a stock. (b) Stock A has a beta relative to the

(a)Explain and present an example for how one uses a price multiple to value a stock.

(b) Stock A has a beta relative to the S&P500 index of 1.25. The correlation between their returns is 0.5. Stock As return standard deviation is 40%. What is then the return standard deviation of an equal-weighted portfolio of stock A and the S&P500 index?

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