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as a senior financial analyst of NCBA bank, you are charged with the responsibility of estimating the expected returns of various securities you want to
as a senior financial analyst of NCBA bank, you are charged with the responsibility of estimating the expected returns of various securities you want to estimate securities pf alpha steel ltd. you decided to use the arbitrage pricing model and you have to derive the following estimate for the factor betas and risk premiums
Factor | Beta | Risk premiums % |
1 | 1.2 | 2.5 |
2 | 0.6 | 1.5 |
3 | 1.5 | 1.0 |
4 | 2.2 | 0.8 |
5 | 0.5 | 1.2 |
I. identify the risk factor for alpha steel works ltd
ii. in the case of an inefficient portfolio on (I) above, state the standard deviation that should efficiently be achieved
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