Question: answer Q3 please 3. a) What is the adjusted beta if the raw beta of a firm is 0.5? (2.5 marks) b) Now is June

answer Q3 please answer Q3 please 3. a) What is the adjusted beta if the

3. a) What is the adjusted beta if the raw beta of a firm is 0.5? (2.5 marks) b) Now is June 2018 and the share price is 30. Reported earnings for the fiscal year ended February 2018 is 2 per share. Forecast earnings for the current fiscal year is 2.5 per share. What is the trailing twelve months PE? (3 marks) An active portfolio constructed using the single-index model has an alpha of 3% and a residual standard deviation of 15%. If the Sharpe ratio of the index portfolio is 0.6, what is the Sharpe ratio of the optimally constructed risky portfolio? (4.5 marks) d) If corr(ri, rm) and corr(T;, rm) are 0.45 and 0.55 respectively, what is corr(rur;)? (2.5 marks)

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