What must be expected return to stock

Assignment Help Financial Management

Reference no: EM131333528

The returns on stocks A and B are perfectly negatively correlated (P_AB = -1). Stock A has an expected return of 21 % and a standard deviation of return of 40%. Stock B has a standard deviation of return of 20%. The risk-free rate of interest is 11 %. What must be the expected return to stock B?

Reference no: EM131333528

Questions Cloud

Why do companies hedge foreign exchange risk : Prepare all journal entries for El Primero in connection with the purchase and payment. El Primero's fiscal year is calendar year. What does the word hedging mean? Why do companies hedge foreign exchange risk?

Compute the realized rate of return for investor : Six years ago the Singleton Company issued 20-year bonds with a 14% annual coupon rate at their $1,000 par value. The bonds had a 9% call premium, with 5 years of call protection. Today Singleton called the bonds. Compute the realized rate of return ..

Identify whether the behavior is ethical or unethical : Your essay should accomplish the following: Identify whether the behavior is ethical or unethical. If ethical, what greater purpose or law enforcement responsibility does it serve to accomplish and why

What is the molarity of fehling solution : What is the molarity of fehling solution ?(Determination of concentration of glucose in different samples by titration with fehling solution)

What must be expected return to stock : The returns on stocks A and B are perfectly negatively correlated (PAB = -1). Stock A has an expected return of 21 % and a standard deviation of return of 40%. Stock B has a standard deviation of return of 20%. The risk-free rate of interest is 11 %...

Write a response about the given discussion : Let's explore the virtual organizational form. Why would a firm decide to implement this approach to organizing? What are the benefits? What is the downside? Provide examples of organizations that have used a virtual organizational structure. ..

What are the purposes of interviews and interrogations : In a minimum of 250 words, post to the Discussion Area your answers to the following: What are the qualities of an effective interviewer and interrogator? What are the purposes of interviews and interrogations

Explain three effects that each victim may experience : Explain three effects that each victim may experience (one psychological, one social, and one emotional). Explain to what extent each effect might be short-term or long-term

What is required rate of return on your company stock : Assume that the average firm in your company's industry is expected to grow at a constant rate of 4% and that its dividend yield is 8%. Your company is about as risky as the average firm in the industry and just paid a dividend (D0) of $1. What is th..

User Account

All Pages