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The following three stocks are available in the market: E(R) β Stock A 10.5 % 1.27...

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Finance

The following three stocks are available in the market: E(R) βStock A 10.5 % 1.27 Stock B 13.7 1.07 Stock C 16.2 1.47 Market 14.11.00 Assume the market model is valid. The return on the market is14.9 percent and there are no unsystematic surprises in thereturns. What is the return on each stock? (Do not roundintermediate calculations and enter your answers as a percentrounded to 2 decimal places, e.g., 32.16.) Return Stock A % Stock B% Stock C % Assume a portfolio has weights of 20 percent Stock A,35 percent Stock B, and 45 percent Stock C. The return on themarket is 14.9 percent and there are no unsystematic surprises inthe returns. What is the return on the portfolio? (Do not roundintermediate calculations and enter your answers as a percentrounded to 2 decimal places, e.g., 32.16.) Return on the portfolio%

Answer & Explanation Solved by verified expert
3.9 Ratings (559 Votes)
As per the Market Model the Return on Stock is as underRs ERs RMERM Rs Return of StockERsExpected Return of Stock Beta ofStockRM    See Answer
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