Question
Aramco Corp. (company A) and Bogota Corp. (company B) have the following betas and forecasted returns: beta(A)=1.5, beta(B)=2, expected return(A)=13%, expected return(B)=11%. If the T-bill
"Aramco Corp. (company A) and Bogota Corp. (company B) have the following betas and forecasted returns: beta(A)=1.5, beta(B)=2, expected return(A)=13%, expected return(B)=11%. If the T-bill rate is 5% and the market risk premium is 4%, how should you trade?"
| Buy A & B | ||
| "Sell A, Buy B " | ||
| "Buy A, Sell B " | ||
| Sell A & B |
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Public Finance
Authors: Charles Francis Bastable
1st Edition
1375520083, 978-1375520089
