Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Mar 17, 2023

he return on an optimal portfolio according to CAPM is estimated to have a standard deviation of 39.69% and the market portfolio is estimated to

he return on an optimal portfolio according to CAPM is estimated to have a standard deviation of 39.69% and the market portfolio is estimated to have a standard deviation of 18.90%.

Calculate the beta value of the portfolio, you can assume that CAPM holds?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

We can use the formula for CAPM which relates the expected return ... blur-text-image

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

Recommended Textbook for

Business Statistics In Practice

Authors: Bruce Bowerman, Richard O'Connell

6th Edition

0073401838, 978-0073401836

More Books

Students also viewed these Finance questions

Question

★★★★★

1. You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 16% and a standard deviation of 20% and a Treasury bill with a...

Answered: 1 week ago

Question

★★★★★

You have been hired at the investment firm of BETA FIRM. One of its clients does not understand the value of diversification or why stocks with the biggest standard deviation of returns do not always...

Answered: 1 week ago

Question

★★★★★

You invest $1,000 in a complete portfolio. The complete portfolio is composed of arisky asset with an expected rate of return of 16% and a standard deviation of 20% and a Treasury bill with a rate of...

Answered: 1 week ago

Question

★★★★★

Partners have fiduciary obligations to each other. Explain what this means and give examples.

Answered: 1 week ago

Question

★★★★★

What is an accrued revenue? Give an example.

Answered: 1 week ago

Question

★★★★★

How do you compute the total manufacturing costs added to production within a schedule of cost of goods manufactured?

Answered: 1 week ago

Question

★★★★★

In Example 7.20, show that if F is exponential with rate , then Average Number Waiting = E[N] That is, when buses arrive according to a Poisson process, the average number of people waiting at the...

Answered: 1 week ago

Question

★★★★★

You can form a portfolio of two assets, A and B, whose returns have the following characteristics: If you demand an expected return of 12%, what are the portfolio weights? What is the portfolios...

Answered: 1 week ago

Question

★★★★★

Objective Type Question: In Chemical engineering, what are the principles of particle technology, and how are they utilized in processes such as crystallization and granulation? A ) Studying...

Answered: 1 week ago

Question

★★★★★

4. Consider the cracks in configurations shown in the figure below. Which of them will grow and if yes, then how? Will the growth be stable or unstable? Explain the reasoning. For the inclined crack...

Answered: 1 week ago

Question

★★★★★

Differential Analysis for Sales Promotion Proposal Sole Mates Inc, is planning a one - month campaign for July to promote sales of one of its two shoe products. A total of $ 1 5 4 , 0 0 0 has been...

Answered: 1 week ago

Question

★★★★★

Assume you are the manager of a company that has pioneered a new kind of salsa for chicken that has taken the market by storm. The salsa's differentiated appeal has been based on a unique combination...

Answered: 1 week ago

Question

★★★★★

Problem 1. Second Degree price discrimination Suppose all consumers are identical and market demand given by p = 100 -3q. The monopoly's cost function is C(q) = 2q2. (a) Suppose the monopolist cannot...

Answered: 1 week ago

Question

★★★★★

Write a paragraph with an investment advice. Your paragraph should address which investment option they should choose, along with an explanation of why that option is the best choice for them. Your...

Answered: 1 week ago

Question

★★★★★

Consider the following multifactor (APT) model of security returns for a particular stock. Factor Inflation Industrial production Oil prices Factor Beta Factor Risk Premium 0.9 8% 0.5 0.2 11 7 a. If...

Answered: 1 week ago

Question

★★★★★

A Risk Versus Reward Approach to Market Research Case study 1. What are the pros and cons of each of the three options under consideration? 2. Which option do you think will yield the most long-term...

Answered: 1 week ago

Question

★★★★★

Assume that ABC Catering Services paid $20,000 for equipment with a 10-year life and zero expected residual value. After using the equipment for four years, the company determines that the asset will...

Answered: 1 week ago

Question

★★★★★

You are maintaining a subsidiary ledger account for Police-Training Expenditures for 2013. The following columns are used: Inventory purchases are initially recorded as expenditures. Record the...

Answered: 1 week ago

Question

★★★★★

Suppose that a random sample of nine measurements from a normally distributed population gives a sample mean of = 2.57 and a sample standard deviation of s = .3. Use critical values to test H0: = 3...

Answered: 1 week ago

Question

★★★★★

Suppose hat probability distribution of a random variable x can be describe by the formula. P(x) = x/15 for each of the values x = 1, 2, 3,4, and 5. For example, then, P(x = 2) = p(2) = 2/15. a....

Answered: 1 week ago

Question

★★★★★

A marketing research firm wishes to study the relationship between wine consumption and whether a person likes to watch professional tennis on television. One hundred randomly selected people are...

Answered: 1 week ago

Question

★★★★★

Compare and contrast the method of allocating income or loss to owners for partnerships and for S corporations.

Answered: 1 week ago

Question

★★★★★

When a corporation's S election is terminated mid-year, what options does the corporation have for allocating the annual income between the S corporation short year and the C corporation short year?

Answered: 1 week ago

Question

★★★★★

Describe the circumstances in which an S election may be involuntarily terminated.

Answered: 1 week ago

Previous Question Next Question