Reference no: EM13115351
There are two stocks, stock A and stock B. The price of stock A today is $70. The price of stock A next year will be $50 if the economy is in recession, $80 if the economy is normal and $95 if the economy is expanding. The attendant probabilities of recession, normal times, and expansion are 0.2, 0.6, 0.2, respectively. Stock A pays no dividend. Assume the CAPM is true. Other information about the market includes:
SD(Rm)= Standard deviation of the market portfolio = 0.10
SD(Rb)= Standard deviation of stock B's return = 0.12
Rb= Expected return on stock B = 0.10
Corr(Ra,Rm)= The correlation of stock A and the market = 0.7
Corr(Rb,Rm)= The correlation of stock B and the market = 0.34
Corr(Ra,Rb)= The correlation of stock A and stock B = 0.6
What is the beta of the portfolio consisting of 30% of stock A and 70% of stock B?
|
How many liters of o2 can be made
: how many liters of o2 can be made from 342g H2o2 if the density of o2 is 1.428g.
|
|
Solving rate of return with excel
: You have two investment opportunities. One will have a 10% rate of return on an investment of $500; the other will have an 11% rate of return on a principal of $700.
|
|
What do you think
: Do you think a comparable spill of a water-insoluble liquid that has a density of 1.20g/mL would have been as harmful to waterfowl and aquatic mammals.
|
|
Calculate the final temperature of the mixture
: A 17.0-g sample of ice at -19.0°C is mixed with 101.0 g of water at 87.0°C. Calculate the final temperature of the mixture assuming no heat loss to the surroundings.
|
|
Computing stock and portfolio beta
: There are two stocks, stock A and stock B. The price of stock A today is $70. The price of stock A next year will be $50 if the economy is in recession, $80 if the economy is normal and $95 if the economy is expanding.
|
|
Price of bond of gator corporation
: The Florida Investment Fund buys 90 bonds of the Gator Corporation through a broker. The bonds pay 8 percent annual interest.
|
|
How much energy in kj must be absorbed
: How much energy in kJ must be absorbed to heat up a volume of ocean water 2 m high by 20 km wide by 30 km deep by 3°C.
|
|
Direct labor costs and overhead-robbins medical records
: Mr. Robbins medical records indicated that a total of 20 labor hours were directly used in providing his care. The cost of the labor was $380. It was expected before the beginning of the year that a total of 90,000 direct labor hours would be cons..
|
|
What is the heat capacity of the calorimeter
: The combustion of an organic compound releases 35.6 kJ of energy and causes the temperature of a constant volume calorimeter to increase by 4.76 °C .
|