Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 26, 2024

Consider a one - factor Arbitrage Pricing Theory model. There are two well - diversified portfolios: A and B . Portfolio A s expected return

Consider a one $-$ factor Arbitrage Pricing Theory model. There are two well $-$ diversified portfolios: A and B $.$ Portfolio As expected return is $24$ percent and its beta is $0.6$ ; Portfolio Bs expected return is $12$ percent and its beta is $0.2 .$ What is the risk $-$ free rate in the model?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

What is the biggest strength of the program?

Answered: 1 week ago

Question

★★★★★

A small motor manufacturer makes two types of motor, models A and B. The assembly process for each is similar in that both require a certain amount of wiring, drilling, and assembly. Each model A...

Answered: 1 week ago

Question

★★★★★

Marvel Parts, Inc., manufactures auto accessories. One of the companys products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use...

Answered: 1 week ago

Question

★★★★★

If the nominal rate of return is 11.09% and the inflation rate is 4.62%, by what percent is actual purchasing power increasing? Enter your answer as a percentage with four decimal places but without...

Answered: 1 week ago

Question

★★★★★

Joe's Book Store stocks the text "Introduction to Materials Management" by Tony Arnold. The demand for this book is very sporadic depending on when APICS courses are offered and when people start to...

Answered: 1 week ago

Question

★★★★★

Which method would best answer the following question? "Do FOX and NBC describe the current economic crisis differently?" Question 17Select one: a. Survey b. Qualitative content analysis c. Focus...

Answered: 1 week ago

Question

★★★★★

What is the first element in the architecture of a loyalty program? Select one: a. SMART analysis. b. SWOT analysis. c. Initial business case. d. Strategic planning

Answered: 1 week ago

Question

★★★★★

Find the unit tangent vector to the curve at the specified value of the parameter. (Give your answers correct to 3 decimal places.) r(t) i+6j, t=2 = Enter a number. Submit Answer -/6 Points] DETAILS...

Answered: 1 week ago

Question

★★★★★

For the gear and shaft assembly shown in the following figure, Fc = 750 N. Determine the reaction forces the bearings at locations "B" and "D" apply to the shaft. z do D Gear 1 50-mm dia. bazius 45...

Answered: 1 week ago

Previous Question Next Question

Question

Consider a one - factor Arbitrage Pricing Theory model. There are two well - diversified portfolios: A and B . Portfolio A s expected return

Consider a one-factor Arbitrage Pricing Theory model. There are two well-diversified portfolios: A and B. Portfolio As expected return is 24 percent and its beta is 0.6; Portfolio Bs expected return is 12 percent and its beta is 0.2. What is the risk-free rate in the model?

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Students also viewed these Finance questions

Question

Question

Question

Question

Question

Question

Question

Question

Question

Consider a one $-$ factor Arbitrage Pricing Theory model. There are two well $-$ diversified portfolios: A and B $.$ Portfolio As expected return is $24$ percent and its beta is $0.6$ ; Portfolio Bs expected return is $12$ percent and its beta is $0.2 .$ What is the risk $-$ free rate in the model?