User Account

All Pages

Covariance between the returns on stocks a and b

Assignment Help Finance Basics
Reference no: EM132801991

The index model has been estimated for stocks A and B with the following results:

RAMARBMB = -0.06 + 0.85R+ e

= 0.03 + 2.95R+ e

The standard deviation of the market index is 18%; the residual standard deviation of the error terms for stock A is 44%; the residual standard deviation of the error terms for stock B is 35%. What is the covariance between the returns on stocks A and B?

Reference no: EM132801991

Questions Cloud

What were your top five identified themes : What were your top five identified themes? Describe a challenge that you faced and how you used three of your top strengths to take action and reach a desired.
Which of the following is not covered under the definition : Which of the following is NOT covered under the definition of business?
Describe components of the financial system : Describe components of the financial system and how each of them interacts with one another.
Find the cost of goods available for sale : A physical count of inventory at the end of the period revealed that $29800 was still on hand. Find the cost of goods available for sale
Covariance between the returns on stocks a and b : The standard deviation of the market index is 18%; the residual standard deviation of the error terms for stock A is 44%; the residual standard deviation
How to write effective research papers using apa style : Education students must know how to write effective research papers using APA style. You will research and write a three to four page research paper discussing.
Determine the size of Danny debt as of today : For the next two years the interest is lowered to 8% compounded annually. Determine the size of Danny's debt as of today
Prepare accounting equation of business of misbah for first : Classify which of the following head of accounts are related to element of accounts? Identify which of the following head of accounts are wrongly linked with elements and put them in right column?
Estimate of the standard deviation : Using the Index Model, what is your estimate of the standard deviation of this complete portfolio?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd