Answer:
1.15
Explanation:
If investment is made in equal proportions, it means that;
weight in risk free ; wRF = 33.33% or 0.3333
Let the stocks be A and B
weight in stock A ; wA = 33.33% or 0.3333
weight in stock B; wB = 33.33% or 0.3333
Beta of A; bA = 1.85
Let the beta of the other stock be represented by "bB"
Beta of risk free; bRF = 0
Beta of portfolio = 1 since it is mentioned that "the total portfolio is equally as risky as the market "
The weight of portfolio is equal to the sum of the weighted average beta of the three assets. The formula is as follows;
wP = wAbA + wBbB + wRF bRF
1 = (0.3333 * 1.85) + (0.3333*bB) + (0.3333 *0)
1 = 0.6166 +0.3333bB + 0
1 - 0.6166 = 0.3333bB
0.3834 = 0.3333bB
Next, divide both sides by 0.3333 to solve for bB;
bB = 0.3834/0.3333
w=bB = 1.15
Therefore, the beta for the other stock would be 1.15
Answer:
the covariance between the security's return and the market return divided by the variance of the market's returns
Explanation:
The market risk, beta of the security would be equivalent to the
Beta = Cov(rm, rs) ÷ Var(rm)
Rm denotes market return
rs denotes security return
Cov denotes covariance
Var denotes variance
Hence, the second option is correct
And, the rest of the options are wrong
Traditional store-based retailers are placing more emphasis on other channels and evolving into online-based business as well as store-based. As times change within society, businesses have to adapt and change so that they grow with their customer base. Although they can still focus on their store-based business, they usually have a split group of people who also prefer to shop within other channels.
Answer:
A.
Explanation:
To building multinational flexibility, you must need the ability to manage risk and exploit opportunities arising from the diversity and volatility of the global environment.
You must understand and manage different forms of risk. Scan and respond to discontinuities in global environment. Also to select most attractive markets.
Localization pressures. There are:
-trade barries
-differences in technical standards
-unique distribution channels
-cultural differences (that impact product use)
-strong local/national
