Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. suppose that the index model for stocks a and b is

Suppose that the index model for stocks A and B is estimated from excess returns...

90.2K

Verified Solution

Question

Finance

image
image
image
Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA - 2,8% + 0.40 : A Re - -1.8% + 0.900 - 15%; R-squares = 0.30: R-squareg - 0.22 Assume you create a portfolio with investment proportions of 0.50 in a risky portfolio P. 0.20 in the market index, and 0.30 in T- bill Portfolio Pis composed of 70% Stock Aand 30% Stock B a. What is the standard deviation of portfolio ? (Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answer to 2 decimal places.) Standard deviation b. What is the beta of portfolio Q? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the bota of portfolio ? (Do not round intermediate calculations. Round your answer to 2 decimal places) Portfolio Deta c. What is the firm specific risk of portfolio O (Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations, Round your answer to 4 decimal places) Form-specinc d. What is the covariance between the portfolio and the market index? (Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answer to 2 decimal places) Covanance

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

3. What happens to your body when you eat something? 1. Explain the science in your...

Medical Sciences
Q

Describe Myasthenia gravis in terms of the adaptive immune response that mediates it and what effect...

Medical Sciences
Q

Washington (CNN)President Donald Trump imposed tariffs on French wine, Italian cheese, and single malt Irish whiskey...

Economics
Q

human resource planning and forecasting( human resource planning process, forecasting HR requirements, methods to forecast HR needs)

General Management
Q

Use technology and the given confidence level and sample data to find the confidence interval for...

Basic Math
Q

3 What is the sum of the measures of the exterior angles of a dodecagon...

Algebra
Q

10 Meaghan just deposited 4000 in an account that pays 2 annual interest Write the...

Algebra
Q

The income statement and a schedule reconcling cash flows from operating activities to net income...

Accounting
Q

6. In how many years will $3500 grow to $8440 at 7.5% compounded quarterly?

Accounting
Q

how can financial data prepared on the basis of variable costing can assist management in...

Accounting
Q

Research a U.S. company in the service industry with e-commerce activities. Write a...

Accounting
Q

An investment of $185,575 is expected to generate returns of $65,000 per year for each...

Accounting