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 at december 31 2014 hyasaki corporation has the following

1. At December 31, 2014, Hyasaki Corporation has the following account balances: Bonds payable, due January 1, 2023 $2,102,000 Discount on bonds payable 113,400 Interest payable 104,960 Show how the above accounts should ...

Students should choose firstly an industry and secondly two

Students should choose firstly an industry and secondly two (2) ASX listed companies in this same industry upon which to undertake a fundamental analysis. Fundamental Analysis seeks to identify factors that are likely to ...

Q1 what are the main differences between a corporation and

Q1. What are the main differences between a corporation and a partnership? Q2. Use your own words, please briefly explain why financial sectors are important.

Impact of credit crisis on risk premiumsexplain how the

Impact of Credit Crisis on Risk Premiums: Explain how the credit crisis affected the credit risk premium in the commercial paper market.

Comment on the european central banks ecb activities in the

Comment on the European Central Banks (ECB) activities in the debt markets under the expanded asset purchase programme. Are they active in securitisation markets?

1 decide whether to accept or reject a special orderviking

1. Decide whether to accept or reject a special order. Viking Corporation is operating at 80% if capacity; which means it produces 8,000. Variable cost is $100 per unit. Wholesaler Y offers to buy 2,000 additional units ...

Examination1 if purchasing power parity applied to big

Examination 1. If purchasing power parity applied to Big Macs, and a Big Mac cost $2.50 in the United States while the British pound cost $1.50 and €0.90 euros could be obtained for $1.00 a) how much would the Big Mac co ...

For this assignment you will examine correlation and

For this Assignment, you will examine correlation and bivariate regression testing. To prepare for this Assignment: Review this week's Learning Resources and media program related to regression and correlation. Using the ...

Influence of money market activity on working capital

Influence of Money Market Activity on Working Capital : Assume that interest rates for most maturities are unusually high. Also, assume that the net working capital (defined as current assets minus current liabilities) l ...

Types of markets distinguish between primary and secondary

Types of Markets Distinguish between primary and secondary markets. Distinguish between money and capital markets.

  • 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

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate