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Given the single factor model r = E(r) + bF + ε for which 340 stocks rely to generate their returns where F is a factor and b is the factor loading and ε is idiosyncratic error. Stock A which is one of the 340 stocks has an expected return of 7% , a factor loading of b = 0.03, a factor F with a mean of zero following a variance of 1 and a standard deviation of idiosyncratic error of 37%. These characteristics are the same for all the 340 stocks. Risk free rate is 3%. The portfolio we hold has equal weight on each stock and places nothing on the risk-free asset.
Question: What is the standard deviation of return on this portfolio and what is the covariance of the stock return with the return of the portfolio ?
If an investor holds shares of about 20 different businesses all of the risk is eliminated and the portfolio will give a return equal
Suppose that the Financial Management Corporation's $1,000-par-value bond had a 5.700% coupon, matured on May 15, 2017, had a current price quote of 97.708, and had a yield to maturity (YTM) of 6.034%.
Assume first payment is made one month from today and you make all of the payments on time, calculate the total amount paid to your financial institution.
The risk-free rate is 0%. The market portfolio has an expected return of 20% and a volatility of 20%. You have $100 to invest.
Explain the "net rent" results in terms of the bargaining potential and the existence of a Nash equilibrium, where R = renovate and NR = no renovation
Activity: Calculation of the Outcomes of the Calls and Puts Held Long and Short Bob needs your opinion. You receive a voice mail. Voicemail from Bob: “I need to decide the best course of action for the use of the stock option contracts such as long c..
The bonds would be 18-year to maturity, carry a 11.60 percent annual coupon, and have a $1,000 par value. Blue Crab, Inc. has determined that these bonds would se for $1,312 each. What is the yield to maturity for these bonds?
[Contract accounting; CFAO adapted On December 31. 1999, I.AS] Construction entered into a major long-term concatenate n with the following terms.
What are some of the performance evaluation methods? How might these methods be perceived as discriminatory?
Monthly payments on the loan will be $5,566, due at the end of each month. What is the amount of 20th principal repayment?
Universal Manufacturing uses a weighted-average process-costing system. All materials are introduced at the start of manufacturing, and conversion costs.
In the counteroffer, Englesen asked Kepple to remove from their contract a clause requiring written confirmation of the availability of a "free split"
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