Estimate the beta of the portfolio

Assignment Help Financial Management

Reference no: EM132008554

Suppose you held a well-diversified portfolio with a very large number of securities, and that the single index model holds.

If the standard deviation of your portfolio was 42% and the standard deviation of the market was 18%, what would be your estimate of the beta of the portfolio?

Hint: Note that a well-diversified portfolio will have a firm-specific variance and a residual standard deviation = 0%.

Enter your answer rounded to two decimal places. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

Reference no: EM132008554

Questions Cloud

Calculate the expected return on that portfolio : What is the expected return and standard deviation of a portfolio that has 125% of its wealth in the S&P, financed by borrowing 25% of its wealth at the risk.

Erg theory and maslow hierachys : What are some differences between the ERG Theory and Maslow's Hierachys and some ways they are alike?

What is the purpose of the indenture : What is the purpose of the indenture? How do I identify sources of risk to the bondholder?

How much income should peck report in year : On December 1, year 1, Peck Advertising receives a $24,000 retainer fee for a two-year service contract. How much income should Peck report in year 1

Estimate the beta of the portfolio : If the standard deviation of your portfolio was 42% and the standard deviation of the market was 18%, what would be your estimate of the beta of the portfolio?

Topic related to employee references : What happened recently about the topic related to employee references? What can be the current events on employee reference?

Would you invest in this portfolio : f you expect to receive a rate of return 9% on this portfolio , would you invest in this portfolio? Explain?

Variety of incentives to encourage fdi inflows : Host countries can offer a variety of incentives to encourage FDI inflows - do these offer an unfair advantage?

Low-skilled minimum-wage employees : What are the challenges in motivating a) professionals and b) low-skilled minimum-wage employees?

User Account

All Pages