11.4 The following three stocks are available in the market. Assume the market model is valid. a....
Question:
11.4 The following three stocks are available in the market.
Assume the market model is valid.
a. Write the market-model equation for each stock.
b. What is the return on a portfolio that is 30-percent stock A, 45-percent stock B, and 25-
percent stock C?
c. Suppose the return on the market is 15 percent and there are no unsystematic surprises in the returns.
i. What is the return on each stock?
ii. What is the return on the portfolio?
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Related Book For 
Corporate Finance
ISBN: 9780071229036
6th International Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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