Question: The following are estimates for two stocks. Stock Expected Return Beta Firm-Specific Standard Deviation A 13 % 0.85 30 % B 19 1.35 39 The

The following are estimates for two stocks.

Stock	Expected Return			Beta	Firm-Specific Standard Deviation
A		13	%	0.85		30	%
B		19		1.35		39

The market index has a standard deviation of 19% and the risk-free rate is 10%.

a. What are the standard deviations of stocks A and B? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. Suppose that we were to construct a portfolio with proportions:


Stock A	0.35
Stock B	0.40
T-bills	0.25

Compute the expected return, standard deviation, beta, and nonsystematic standard deviation of the portfolio. (Do not round intermediate calculations. Enter your answer for Beta as a number, not a percent. Round your answers to 2 decimal places.)

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!

Determine the force in members GF, CF, and CD of the roof truss and indicate if the members are in tension or compression. 1.5 kN 1.70 m 2 kN 1.5 m 0,8 m G. -1 m- 2 m 2 m

The following are estimates for two stocks. Stock Expected Return Beta firm-specific Standard Deviation A 0.13 0.85 0.33 B 0.21 1.33 0.37 The market index has a standard deviation of 0.23 and the...

The following are estimates for two stocks. Stock Expected Return Beta Firm-specific standard deviation A 13% 0.8 30% B 18% 1.2 40% Using the two assets above, assuming that the coefficient of risk...

Question 7 1 pts The following are estimates for two stocks. Stock Expected Return Beta firm-specific Standard Deviation 0.13 0.7 0.33 0.18 1.34 0.39 The market index has a standard deviation of 0.16...

The following are estimates for two stocks. Stock Expected Return Beta Firm-Specific Standard Deviation A 10 % 0.95 35 % B 17 1.50 45 The market index has a standard deviation of 19% and the...

The following are estimates for two stocks. Stock Expected Return Beta Firm-Specific Standard Deviation 0.90 1.25 14% 19% 40% 30% The market index has a standard deviation of 22% and the risk-free...

1) The following are estimates for two stocks. Stock Expected Return Beta firm-specific Standard Deviation A 0.15 0.8 0.27 B 0.19 1.13 0.37 The market index has a standard deviation of 0.21 and the...

#1: [20 POINTS] Index Model: The following are estimates for two stocks. Stock Expected Return Beta Firm-Specific Standard Deviation A 13% 0.8 30% B 18% 1.2 40% The market index has a standard...

The following are estimates for two stocks. Stock Expected Return Beta Firm-Specific Standard Deviation A 12% 0.80 30% B 21 1.35 46 The market index has a standard deviation of 20% and the risk-free...

2. (Ch. 8) The following are estimates for two stocks. Stock Expected Return Beta Firm-Specific Standard Deviation A 13% 0.8 30% B 19 1.3 45 The market index has a standard deviation of 22% and the...

The following are estimates for two stocks. stock expected return Beta Firm-Specific standard deviation A 14% 0.8 20% B 19% 1.3 25% The market index has a standard deviation of 23% and expected...

Q.27 A strip is to be rolled from a thickness 30 mm to 15 mm using a two high mill having rolls of diameter 300 mm. The coefficient of friction for unaided bite should nearly be

Q4 (a) Sucrose, common table sugar, is composed of glucose and fructose. Identify the configuration (a or B) of the two anomeric centers of sucrose. - 0

As compared to venture capital firms, private equity firms specialize in assisting existing companies that have proven themselves in their industry. True False

last two options for the multiple choice are : performance management development A construction equipment manufacturer, Roswell Corporation, is focusing on becoming a leader in sustainability in...

b. Explain how you initially felt about the communication.

1. Identify four early foci in the development of intercultural communication.

e. Based on this experience, identify some characteristics that may be important for successful intercultural communication.