Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Stock E(R) Standard Deviation Correlation between the stock and the market portfolio

A 13% 12% 0.9

B 11% 16% 0.5

C 16% 23% 0.3

Standard Deviation for the market portfolio: 8%

Risk free rate of return: 3%

Market rate of return: 11%

a. find out the alpha of three stocks above and determine if each stock is underpriced or overpriced. (Hint: You will have to find out each stock's beta first)

b. If you currently hold a market index portfolio, which stock is the best stock to add to your portfolio? describe your answer.

c. If you could invest only in T-bills and one of these portfolios, which would you choose? describe your answer.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M938329

Have any Question? 


Related Questions in Basic Finance

1 under what conditions might a property with an assumable

1. Under what conditions might a property with an assumable loan sell for more than comparable properties with no assumable loans available? 2. What is meant by the incremental cost of borrowing additional funds? 3. Is t ...

In 2013 the lissa company paid dividends of 10000000 on

In 2013, the Lissa Company paid dividends of $10,000,000 on after-tax income (cash flow) of $25,000,000. Capital budget projects totaled $15,000,000 in 2013.   2013 was a normal year for earnings, dividends, and capital ...

Use secondary sources to write a report about female

Use secondary sources to write a report about female leaders in business. 2020 Women on Boards is an organization dedicated to raising the percentage of women on corporate boards to at least 20% by the year 2020. As part ...

1 a successive independent survey design and a longitudinal

1. A successive independent survey design and a longitudinal survey design both examine changes in responses over time. How do they differ in their approach? 2. Distinguish between demographic and epidemiological researc ...

1 discuss the pros and cons of using naturalistic versus

1. Discuss the pros and cons of using naturalistic versus contrived observation. 2. What special opportunities and problems does participant observation create for researchers? 3. What does it mean if a behavior is react ...

Explain how a short call added to a protective put forms a

Explain how a short call added to a protective put forms a collar and how it changes the payoff and up-front cost? Explain the process by which the profit of a short straddle closed out prior to expiration is influenced ...

Assignment - financial research report amanda todds

Assignment - Financial Research Report Amanda Todd's Story Watch the video titled "Amanda Todd's Story: Struggling, Bullying, Suicidal, Self-harm" (8 min 55 s). Video Source: ChisVideos. (2012, October 11). Amanda Todd's ...

If asset as beta is greater than asset bs beta does this

If asset A's beta is greater than asset B's beta, does this mean that asset A has more risk than asset B? Explain? What is the difference between the security market line and the capital market line? How should an invest ...

As diversification is desirable a financial institution

"As diversification is desirable, a financial institution should never specialize in making specific types of loans." Is this statement true, false, or uncertain? Explain your answer Use APA format for any quotations or ...

1 outline the monetary system used in this country2 how

1. Outline the monetary system used in this country. 2. How does the Federal Reserve increase the money supply? 3. How does the Treasury raise money when it has to borrow? 4. Explain the major factors that influence inte ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen