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19. Stocks A and B each have an expected return of 12%, a beta of 1.2, and a standard deviation of 25%. The returns on
19. Stocks A and B each have an expected return of 12%, a beta of 1.2, and a standard deviation of 25%. The returns on the two stocks have s correlation of +0.6. Portfolio P has 50% in Stock A ind 50% in Stock B. Which of the following statements is CORRECT? a. Portfolio P has a beta that is greater than 1.2 b. Portfolio P has a standard deviation that is greater than 25%. c. Portfolio P has an expected return that is less than 12%. d, Portfolio P has a standard deviation that is equal to 25%, e. Portfolio P has a beta that is equal to 1.2. 20. Roenfeld Corp believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock? Probability of State Occurring 040 0.20 040 Stock's Expected Retam- 25% 15% 5% State of the Economy Boom Normal Recession a. 0.2339 b. 0.3069 c. 04563 d. 0.5963 e. 0.6813 21. The Isberg Company just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 5.50/% per year in the future. The company's beta is 1.05, the market risk premium is 5 00%, und the risk-free rate is 4.00%, what is the company's current stock price, p57 a. $18,62 b. $19,08 c. $19.56 d. $20.05 e. $21.10
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