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Can you answer the questions below? Question 1 Momentum is an anomaly that gives those subscribing in efficient markets the most trouble. What is Momentum

Can you answer the questions below?

Question 1

Momentum is an anomaly that gives those subscribing in efficient markets the most trouble. What is Momentum in stock prices? Why is this a problem for the efficient market hypothesis?

Question 2

Stock ABC has a beta of 1.4 and the standard deviation of its returns is 30%.The market risk premium is 5% and the risk-free rate is 3%.

1.What is the expected return for the stock?

2.What are the expected return and standard deviation for a portfolio that is equally invested in the stock and the risk-free asset?

If you forecast that next year stock ABC will have return of 10%.Would you buy it?Why or why not?

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