How do we measure risk by using the standard deviation

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Reference no: EM132007866

1. How do we measure risk by using the Standard Deviation [SD]? Can you use the SD to build low-risk portfolios? [Do not discuss Beta].

2. An individual has $35,000 invested in a stock with a beta of 0.8 and another $60,000 invested in a stock with a beta of 2.0. If these are the only two investments in her portfolio, what is her portfolio's beta? Round your answer to two decimal places.

3. Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: r hat L = 14%; rRF = 6.9%; rM = 10%. Round your answer to two decimal places.

Reference no: EM132007866

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