Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you are supplied with information about three secu

You are supplied with information about three securities (G, P & Q) and the market...

80.2K

Verified Solution

Question

Finance

You are supplied with information about three securities (G, P & Q) and the market (M), shown in the table below. In addition, treasury bills yield 1% and the market is expected to earn 5% more than t-bills.
\table[[Security,SD,Correlations],[Market,G,P,Q],[G,0.15,0.80,1.00,0.40,0.30],[P,0.30,0.50,0.40,1.00,0.25],[Q,0.20,0.40,0.30,0.25,1.00],[Market,0.10,1.00,0.80,0.50,0.40]]
Required:
(a) Compute the beta and expected return of each security, G, P & Q.(6 marks)
B) What would be the expected return and stand dertation of a portfolio that invested 30% of its funds in G,20% in P and 50% in Q?You are supplied with information about three securities (G, P & Q) and the market (M), shown in the table below. In addition, treasury bills yield 1% and the market is expected to earn 5% more than t-bills.
\table[[Security,SD,Correlations],[Market,G,P,Q],[G,0.15,0.80,1.00,0.40,0.30],[P,0.30,0.50,0.40,1.00,0.25],[Q,0.20,0.40,0.30,0.25,1.00],[Market,0.10,1.00,0.80,0.50,0.40]]
Required:
(a) Compute the beta and expected return of each security, G, P & Q.(6 marks)
B) What would be the expected return and stand dertation of a portfolio that invested 30% of its funds in G,20% in P and 50% in Q?
image

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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

Which statement most accurately describes the relationship between Hinduism and the Indian caste system?A. Individuals...

Biology
1.2K views

Plate tectonics explain continental warping isostatic rebound

Biology
1.2K views

Solution with a pH of 7 is and pH of 10 is and pH of...

Physics
1.2K views

Students I II and III perform an exp measuring the acceleration due to gravity g...

Physics
1.2K views

54 Four point masses of value 2 5 6 and 3 kg are placed at...

Accounting
1.2K views

Materials and conversion costs are added evenly throughout the production process. Beginning inventory amounted to...

Accounting
1.2K views

Periodic inventory by three methods; cost of goods sold The units of...

Accounting
1.2K views

The following account balances are for the Agee Company as of January 1, 2017, and...

Accounting
1.2K views

Pluton makes particular plastics for sale to the public and the government. Basic cost data...

Accounting
1.2K views

Last year a company had sales of $600,000, a turnover of 3.6, and a return...

Finance
1.2K views

We project unit sales for a new household-use laser-guided cockroach search and destroy system as...

Finance
1.2K views

Find the present value of the following ordinary simple annuity Periodic Payment $672.00 Payment Interval...