Question
Given the following information about Stock A: P0 = $62.75 Beta-A = 1.3 D1 = $2.20 paid at end of year KM = 11% annual
Given the following information about Stock A: P0 = $62.75 Beta-A = 1.3 D1 = $2.20 paid at end of year KM = 11% annual Rf = 5% annual
a. Estimate the price of stock A at the end of the year
b. Suppose that Stock a is combined with two other stocks as follows:
Stock - Proportion - Beta
A 0.25 1.3
B 0.40 0.9
C 0.35 1.1
c. What is the beta of the portfolio of three stocks?
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Economics Of Money Banking And Financial Markets
Authors: Frederic S. Mishkin
6th Edition
0321113624, 978-0321113627
