1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Leya [2.2K]
3 years ago
10

Stock A has an expected return of 10% and a standard deviation of 20%. Stock B has an expected return of 13% and a standard devi

ation of 30%. The risk-free rate is 5% and the market risk premium, rM- rRF, is 6%. Assume that the market is in equilibrium. Portfolio AB has 50% invested in Stock A and 50% invested in Stock B. The returns of Stock A and Stock B are independent of one another, i.e., the correlation coefficient between them is zero. Which of the following statements is CORRECT? a. Portfolio AB's required return is 11%. b. Portfolio AB's standard deviation is 25%. c. Stock A's beta is 0.8333. d. Stock B's beta is 1.0000. e. Since the two stocks have zero correlation, Portfolio AB is riskless.
Business
1 answer:
Nina [5.8K]3 years ago
3 0

Answer:

Expected Portfolio return = 0.5(10)+0.5(13)= 5+6.5=11.5%

Expected Portfolio SD= 0.5(20)+0.5(30)= 25%

Beta of A, 10= 5+B(6)

5=6B

B= 5/6= 0.833

B of B, 13=5+B(6)

8=6B

B=8/6

B=1.33

b. Portfolio AB's standard deviation is 25%

c. Stock A's beta is 0.8333

These two statements are correct

Explanation:

You might be interested in
Gabriel Corporation has fixed costs of $180,000 and variable costs of $8.50 per unit. It has a target income of $268,000. How ma
baherus [9]

Answer:

uh... 180 divide by 8.5... multiply to 12

5 0
3 years ago
Describe three different types of organizational cultures. When would each be most and least effective for a research and develo
fiasKO [112]

Explanation:

Organizational culture is the set of values, policies, beliefs that is shared by all employees of an organization in order to drive the behavior of all organizational parts.

Some types of organizational culture may be:

  1. Power Culture:  In this model of organizational culture, the focus is on leadership, usually attributed to the entrepreneur or a manager. It is more centralized and focused on results. There are also barriers to the development of skills and competencies among employees, due to the difficulty of implementing innovation in organizational processes, which is only incumbent on the leader.
  2. Role Culture: The focus is on employee performance, but there are still well-structured and inflexible processes that make it difficult for employees to implement innovation.
  3. People Culture: The focus of this type of culture is the employees, they are well valued, there is greater interaction between teams and there is a great chance for professional growth and development, as this is the most relevant type of culture for workers to collaborate with. innovative ideas and creative solutions to aid in organizational processes.

8 0
3 years ago
What is the primary role of our banking system?
Serhud [2]

Answer:

See explanation section

Explanation:

The primary role of the banking system is to accept deposits from the general public so that the money can be given as a loan to the public in an effective way to foster the economy. It is the safest platform where people keep their money to get a bonus while people borrow money to continue operating.

6 0
3 years ago
Read 2 more answers
Economic efficiency in a free market occurs when
Diano4ka-milaya [45]

Answer: Economic efficiency in a free market occurs when C) the sum of consumer surplus and producer surplus is maximized.

Explanation: Economic efficiency happens when resources are distributed in a way that allows for the least amount of waste so that there is little inefficiency. When all items are maximized, there is little waste happening and therefor the economic has achieved economic efficiency.

6 0
3 years ago
Richards Company manufactures a single product. All raw materials used are traceable to specific units of product. Current infor
Mice21 [21]

Answer:

what im iin 5th grade

Explanation:

8 0
3 years ago
Other questions:
  • Distinguish between serial activities and concurrent activities why do we seek to use concurrent activities as a way to shorten
    15·1 answer
  • whether investments are reported as current assets or noncurrent assets depends on the company's intent. (points : 5) true false
    6·1 answer
  • Real world question: There will be times where co-workers will be slack and not pull their weight on the team. How will you hand
    10·1 answer
  • The following is selected financial information for Osmond Dental Laboratories for 2021 and 2022: 2021 2022 Retained earnings, J
    7·1 answer
  • Hal Gore won a $2.1 million prize for special contributions to environmental research. This prize is awarded for public achievem
    13·1 answer
  • Well organized buisiness writing uses short sentences and paragraphs. True or False?
    8·1 answer
  • "A 25-year old client with a low risk tolerance wishes to invest in bonds. The client has invested in equities before, but has n
    8·1 answer
  • Software Distributors reports net income of $58,000. Included in that number is depreciation expense of $11,500 and a loss on th
    14·1 answer
  • The Perry Company reported Accounts Receivable, Net of $66,000 at the beginning of the year and $72,900 at the end of the year.
    10·1 answer
  • Plz help :)
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!