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NOT NEEDED ANYMORE DONT ANSWER> Stock Expected Return Standard Deviation Beta A % 0.7 B 1.1 C 1 1.6 Fund P has one-third of its
NOT NEEDED ANYMORE DONT ANSWER>
Stock | Expected Return | Standard Deviation | Beta | ||
A | % | 0.7 | |||
B | 1.1 | ||||
C | 1 | 1.6 |
Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5.5%, and the market is in equilibrium. (That is, required returns equal expected returns.)
- What is the market risk premium (rM - rRF)? Round your answer to one decimal place.
%
- What is the beta of Fund P? Do not round intermediate calculations. Round your answer to two decimal places.
- What is the required return of Fund P? Do not round intermediate calculations. Round your answer to two decimal places.
%
- What would you expect the standard deviation of Fund P to be?
- Less than 16%
- Greater than 16%
- Equal to 16%
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