FINA 3320 Section US Save Homework: Module 9: Chapters 10 and 11 - Risk and Return, Po 25 of 26 (4 complete) HW Score: 3.85%, 1 of 26 pts Score: 0 of 1 pt P11-47 (similar to) Question Help Suppose you group all the stocks in the world into mutually exclusive portfolios (each stock is in only one portfolio) growth stocks and value stock. Suppose the two portfolios have equal size in terms of total value), a correlation of 0.5, and the following characteristics. The risk free-rate is 23 What is the expected return and volatility of the market portfolio (which is a 50-50 combination of the two portfolios)? b. Calculate the Sharpe ratios of the value stock, growth stock, and market portfolio c. Does the CAPM hold in this economy? (Hint is the market portfolio efficient?) Data Table a. What is the expected retum and volatility of the market portfolio (which is a 50 50 The expected return of the market portfolio is % (Round to one decimal place) (Click on the following icon in order to copy its contents into a spreadsheet) Expected Return Volatility Value Stocks 10% 9% Growth Stocks 16% 21% Print Done Enter your answer in the answer box and then click Check Answer, KAWE iles - Unupions TU AI U 11 - Risk and Return, Po Score: 0 of 1 pt 25 of 26 completa HW Score: 23.08% of 26 pts P11-47 (similar to) Question Help Suppose you group all the stocks in the world into mutually exclusive portfolios en stock is in only one portfolio growth stocks and valestock Suppose the two portfolio size (in terms of total value a correlation of 0.5, and the following characteristics. The risk free-rate is 2% a. What is the expected return and volatility of the market portfolio which is a 50-50 combination of the two portfolio b. Calculate the Sharpe ratio of the value stock, growth stock and market portfolio c. Does the CAPM hold in this economy (int is the market portfolio efficient a. What is the expected return and volatility of the market portfolio (which is a 50-50 combination of the two portfolos)? The expected return of the market portfolio s % (Round to one decimal place) ans res ato mutually exclusive portfolios (each stock is in only one portfolio): growth stocks and value s , and the following characteristics: The risk free-rate is 2%. ne market portfolio (which is a 50-50 combination of the two portfolios ? Data Table (Click on the following icon in order to copy its contents into a spreadsheet.) Value Stocks Growth Stocks Expected Return 10% 16% Volatility 9% 21% Print Done click Check
