(Answered) The expected return of stock a is 20 per year and the

Finance

The expected return of stock A is 20% per year and the stock's annual standard deviation is 45%. There is also a risk-free asset. When a complete portfolio is formed with a portfolio weight on the risky asset of 35%, the expected return on the complete portfolio is 8.0%.

(a) Compute the risk-free rate of return.

(b) Compute the annual standard deviation of the complete portfolio above

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92726727
Price:- $15

Verified Expert

Priced at $30 Now at $15, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Question 1 -a this is a two period certainty model

QUESTION 1 - a) This is a two period certainty model problem. Assume that Daisy Brown has a sole income from Fantasy Ltd in which she owns 15% of the ordinary share capital. Currently, she has no savings. In February, 20 ...

Suppose a firm pays total dividends of 1100000 out of net

Suppose a firm pays total dividends of $1,100,000 out of net income of $5.5 million. What would the firm's payout ratio be? (Round your answer to 2 decimal places.)

What are the steps to find stock price in 15 years if abcs

What are the steps to find stock price in 15 years if ABC's next dividend is expected to be $6.16, its required return is 18%, its growth rate is 7%. How to find current stock price if ABC Company's last dividend was $0. ...

The business model for jpmorgan chase was change in 2008

The business model for JPMorgan Chase was change in 2008. Could the upside of the strategy have been achieved without exposing JPMorgan Chase the bank?

Corporate fund started the year with a net asset value of

Corporate Fund started the year with a net asset value of $15.90. By year-end, its NAV equaled $13.80. The fund paid year-end distributions of income and capital gains of $3.30. What was the rate of return to an investor ...

If hairbran stylists is evaluating a project that costs

If Hairbran Stylists is evaluating a project that costs $42,000 and the project will generate $11,000 over each of the next 5 years with a required rate of return of 9%, should they accept the project? What is the net pr ...

The interest rate on one-year treasury bonds is 1 the rate

The interest rate on one-year treasury bonds is 1%, the rate on two-year treasury bonds is 0.9%, and the rate on three-year treasury bonds is 0.8%. Using the expectations theory, compute the expected one-year interest ra ...

Financial statement analysis for comcastprepare an eight-

Financial Statement Analysis for Comcast Prepare an eight- to ten-page fundamental financial analysis (excluding appendices, title page, abstract, and references page) that will cover each of the following broad areas ba ...

What is the present value of a security that will pay 9000

What is the present value of a security that will pay $9,000 in 20 years if securities of equal risk pay 12% annually? Round your answer to the nearest cent

A young couple decide to take advantage the current

A young couple decide to take advantage the current first-time home buyer credit and buy a new house. With their combined income, they can afford to make a maximum of $800 monthly payment. With their credit history, they ...

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