Rework Problem 13 for portfolio Q with investment proportions of 50 in P, 30 in the market index, and 20 in T bills Suppose that the index model for stocks A and B is estimated from excess returns with the following results RA 3 1 7RM eA RB 22 1 1 2RM eB M 20 R squareA 5 20 R squareB 12 ...

The variance of Tbills is zero an ...

Rework Problem 13 for portfolio Q with investment proportions of .50 in P, .30 in the market

Question:

Rework Problem 13 for Q with investment proportions of .50 in P, .30 in the market index, and .20 in T-bills.
Suppose that the index model for A and B is estimated from excess returns with the following results:
RA = 3% 1 .7RM + eA
RB = 22% 1 1.2RM + eB
σM = 20%; R-squareA 5 .20; R-squareB = .12

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...