Question: Show explanation for each question 4. A project has a 0.34 chance of doubling your investment in a year and a 0.66 chance of halving

Show explanation for each question

Show explanation for each question 4. A project has a 0.34 chance

4. A project has a 0.34 chance of doubling your investment in a year and a 0.66 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment? 5. Here are data on two companies. The T-bill rate is 5.2% and the market risk premium is 8.0%. 6. What is the expected rate of return for a stock that has a beta of 1 if the expected return on the market is 18%? Hint: Think about the denition of beta 21.) 18% b.) More than 18% (3.) Cannot be determined without the risk-free rate 7. What must be the beta of a portfolio with E03,) = 14.60%, if r, = 5% and E(r\") = 13%

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