age Asset j's standard deviation of return is o 0.6, while for the market portfolio OM...
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age Asset j's standard deviation of return is o 0.6, while for the market portfolio OM 0.4. The expected rate of return on the market portfolio is M = 12% and the correlation between the rate of return risk-free interest rate is ro 2%. Let PjM on asset j and that of the market portfolio. = A. The information is compatible with the Capital Asset Pricing Model, CAPM, if PjM 0.8 and the expected rate of return on asset j, j, equals 14%. B. If PM = 0, the CAPM predicts that ; equals 0% (zero). C. If PjM= +1, asset j's beta-coefficient, 3, = 0.4/0.6 0.67. D. If PjM=+1, asset j's beta-coefficient, 3, = 0.8. E. None of the above. Select one: OA. OB. O D. - OE. C age Asset j's standard deviation of return is o 0.6, while for the market portfolio OM 0.4. The expected rate of return on the market portfolio is M = 12% and the correlation between the rate of return risk-free interest rate is ro 2%. Let PjM on asset j and that of the market portfolio. = A. The information is compatible with the Capital Asset Pricing Model, CAPM, if PjM 0.8 and the expected rate of return on asset j, j, equals 14%. B. If PM = 0, the CAPM predicts that ; equals 0% (zero). C. If PjM= +1, asset j's beta-coefficient, 3, = 0.4/0.6 0.67. D. If PjM=+1, asset j's beta-coefficient, 3, = 0.8. E. None of the above. Select one: OA. OB. O D. - OE. C
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Related Book For
Financial management theory and practice
ISBN: 978-1439078099
13th edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
Posted Date:
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