The systematic measure of risk is captured

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Reference no: EM132037023

1. Mr. Jones has a 2-stock portfolio with a total value of $560,000. $225,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 20.40%, Stock B is 10.25%, and correlation between Stock A and Stock B is –0.80, what would be the expected risk on Mr. Jones’ portfolio (standard deviation of the portfolio return)?

Calcualte with at least 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.

4.94%

4.79%

6.12%

3.90%

4.20%

2. In the context of the capital asset pricing model, the systematic measure of risk is captured by _________.

beta

the standard deviation of returns

unique risk

the variance of returns

Reference no: EM132037023

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