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1. You own a portfolio that is equally invested in a risk free asset and two stocks. If one of the stocks has a beta of 0.8, and the total portfolio is as risky as the market, what must be the beta of the other stock in your portfolio?

2. How do simulation analysis and scenario analysis differ in the way they treat very bad and very good outcomes? What does this imply about using each technique to evaluate project riskiness?

3. A stock has a beta of 3.0 and an expected return of 10%. The risk free asset currently earns 6%. If a portfolio of the two assets has an expected return of 8%, what is its beta?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92845149

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