Question assume that the capm holds a portfolio p that, Ask an Expert

Finance

Question: Assume that the CAPM holds A Portfolio P that combines the risk-free asset and the market portfolio has an expected return of 14% and a return standard deviation of 18%. the risk-free rate is 5%, and the expected return on the market portfolio is 17%. Consider a security Z What expected rate of return would you expect Z to earn if it had a 0 40 correlation with the market portfolio and a standard deviation of 36%? Comment on the market risk associated with security Z.

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92775188

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Ye observed the following returns over timeyear

You have observed the following returns over time: Year BMG Market 1990 18% 13% 1991 4% 8% 1992 -12% 3% 1993 16% 10% 1994 18% 11% What is the beta for BMG?

What is net present value in terms of evaluating a project

What is Net Present Value in terms of evaluating a project? What is better NPV or Internal Rate of Return when evaluating?

The pretzel factory has net sales of 841300 and cost of

the pretzel factory has net sales of 841,300 and . cost of 698500. the depreciation expense is 28400 and the interest paid is 8400. The firms marginal tax rate is 35 percent what is the firms operating cash flow?

The inside door has total debt of 76662 total equity of

The Inside Door has total debt of $76662, total equity of $224477, and a return on equity of 12.7 percent. What is the return on assets? Input your answer as a decimal rounded to 4 places (i.e., 1% = 0.0100).

Does the agency problem only happen in the relationship

Does the agency problem only happen in the relationship between Employees and Stockholders? How about the relationship between clients and stars?

Your firm needs a machine which costs 190000 and requires

Your firm needs a machine which costs $190,000, and requires $40,000 in maintenance for each year of its 7 year life. After 5 years, this machine will be replaced. The machine falls into the MACRS 7-year class life categ ...

What are the advantages of purchasing an existing business

What are the advantages of purchasing an existing business opposed to opening a new venture?

One year ago you bought common stock for 20 per share today

One year ago, you bought common stock for $20 per share. Today the stock is selling for $19 per share. During the year, you received four dividend payments, each in the amount of $0.20 per share. (a) What was your rate o ...

Assume that a firm could borrow 100 billion dollars the

Assume that a firm could borrow 100 billion dollars. The most straightforward value from the leveraged recapitalization that people would estimate is the present value of interest tax shield. Assume the cost of debt is 0 ...

Us bank has determined that its bond portfolio has a

US Bank has determined that its bond portfolio has a duration of 9.5 years and a prevailing yield to maturity of 4.0 percent. If the yield to maturity changes to 5.5 percent, then US Bank should anticipate how much of a ...

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

Recent Questions

Ask Basic Finance Expert