Find the risk premiums for each factor

Reference no: EM1350802

Suppose stock returns can be explained by a two-factor model information for two diversified portfolios:

B1 B2 Expected Return
Portfolio A .85 1.15 16%
Portfolio B 1.45 -.25 12%

If the risk free rate is 4%, what are the risk premiums for each factor in the model?

Reference no: EM1350802

Questions Cloud

Types of psychological theory : The four types of psychological theory are listed below. In your own words, briefly describe each one.

Types of performance pay : Provide a brief description of the 5 types of individual performance pay, and recommend which type of job would benefit by using which type of performance pay.

Create an incident-response policy : Create an incident-response policy that covers the development of incident-response team, disaster-recovery processes, and business-continuity planning.

Example of how economics relates to the sport industry : Describe economics and provide an example of how economics relates to the sport industry and describewhat an economic impact study represents.

Find the risk premiums for each factor : Assume stock returns can be explained by a two-factor model information for two diversified portfolios. The risk free rate is 4%

Explain what do you think the advantages system : Explain What do you think the advantages and disadvantages of this system are

Paper regarding sexual attitudes : Write a paper (not including title and reference pages) in APA format discussing what social and cultural influences affect adolescent sexual attitudes and behaviors.

Competing effectively in the market for energy drinks : Competing effectively in the market for energy drinks, sports drinks and Vitamin-Enhanced beverages - Enhance PepsiCo's Future Performance

Determine the amount of each stock : Michelak's Maritime Industries has relatively stable earnings and pays an annual dividend of $2.50 each share. This dividend has remained constant over the past few years and is expected to remain steady for some time to come.

User Account

All Pages