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erma4kov [3.2K]
3 years ago
6

Consider the one-factor APT. The standard deviation of returns on a well-diversified portfolio is 18%. The standard deviation on

the factor portfolio is 16%. The beta of the well-diversified portfolio is approximately:_________
Consider the single-factor APT. Stocks A and B have expected returns of 15% and 18%, respectively. The risk-free rate of return is 6%. Stock B has a beta of 1.0. If arbitrage opportunities are ruled out, stock A has a beta of:__________
Business
1 answer:
Luden [163]3 years ago
5 0

Answer and Explanation:

The computation is shown below:

1. For Beta^2

= Standard Deviation of Well Diversified Portfolio^2 ÷ Standard Deviation of factor Portfolio^2

= (18%^2 ÷ 16%^2)^0.5

= 18 ÷ 16

= 1.125 or 1.13

And,

2. Expected Return = Risk free rate + Beta ×Factor

18% = 6% + 1 × F

F = 12%

The Beta of A is

= (15% -  6%) ÷ 12%

= 0.75

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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a. True

b. False

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Explanation:

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All other variables held constant, investments paying simple interest have to pay significantly higher interest rates to earn the same amount of interest as an account earning compound interest.

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3 years ago
Blissful Blankets' target profit is $520,000. Each blanket has a contribution margin of $21. Fixed costs are $320,000. The numbe
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<h3>How to calculate the target profit</h3>

From the information, Blissful Blankets' target profit is $520,000 and each blanket has a contribution margin of $21. Fixed costs are $320,000.

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Some people include a letter of last instruction in their estate planning. What is likely TRUE about this letter?
iVinArrow [24]

Answer:

C

Explanation:

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Answer:

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