Question: suppose Market return can be +1% or -1% with equal probability. When Market return is +1% stock A returns 2%. When Market return is -1%

suppose Market return can be +1% or -1% with equal probability. When Market return is +1% stock A returns 2%. When Market return is -1% stock A returns -2% what is the beta of stock A

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Faulkner University typically offers evening classes that should run from 6:00 p.m. to 9:30 p.m. Let's look at a hypothetical situation: suppose that the actual university-wide average for evening...

Suppose market return can be +10% or -10% with equal probability. When market return is +10%, stock A returns +5%. When market return is -10%, stock A returns -5%. What is the beta of stock A?

4. (15 pts) You have observed the following returns over time Year Stock X Stock Y 13% -5 Market 1992 14% 199319 1994 -16 1995 3 1996 20 12% 10 -12 15 Assume that the risk-free rate is 6 percent and...

4. (15 pts) You have observed the following returns over time: Year Stock X 199214% 199319 1994-16 19953 199620 Stock Y Market 13% 12% 7 10 -5 -12 1 1 11 15 Assume that the risk-free rate is 6...

Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns. What is Beta for the aggressive stock? round your answer to two...

Catastrophic Events and Retroactive Liability Insurance: The Case of the MGM Grand Fire Stephen P. Baginski Richard B. Corbett William R. Ortega* This study examines the capital market response to...

Please, I need help with the calculations for the following 25 problems in the "final" tab of the workbook before 9pm CST. FINC 340 Quizzes 1 2 Derivatives can be strictly defined as Financial...

Hello, I need help with the highlighted questions(I, J, and K). Also, can you please explain how you completed the regression part. The assignment is Week 5 assignment. The other documents are from...

This question is designed to deepen your understanding of CAPM by practicing the use of CAPM formula. In Simple World there are only two risky stocks, A and B, whose details are listed in the...

can any expert help me to work on the questions below?? i need it done correctly as soon as possible FINC 340 Quizzes 1 2 Derivatives can be strictly defined as Financial intermediaries are extremely...

50. Research by Jeremy Stein of MIT resolves the dispute over whether beta is a sufficient pricing factor by suggesting that managers should use beta to estimate A. long-term returns but not...

Creditor Ledger balance of XYZ business as at 01.03.2014 are as follows; Creditor Name Value (Rs.) Asitha 25,000.00 Visitha 44,000.00 Lasith 12,000.00 Total 81,000.00 The summary of the transaction...

Question 10 (1 point) Listen Which of the following financial statements tracks the changes in cash position of the entity over the prior fiscal year? Question 10 options: Income statement Balance...

Draw a class diagram and its relationship based on the following statements. You can use any UML tool/software to represent your class diagram. Do NOT copy and paste your diagram, use the attachment...