If an investor buys enough stocks, he or she can, through diversification, eliminate all of the market risk inherent in owning s
1 answer:
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Answer:
a. 5.18%;
b. 10.12%;
c. 6.32%;
d. 9.22%.
Explanation:
We apply the formula of Annual rate of return to calculate for the four cases.
The formula for calculating annual rate of return as below:
Annual rate of return = -1 ;
So, for each of the case given, by applying the formula, the detailed calculations for each case will be:
+ For case a :
= 5.18%;
+ For case b:
= 10.12%;
+ For case c:
= 6.32%;
+ For case d:
= 9.22%.