FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Portfolio A has a covariance with Portfolio B of .09 and a covariance with the market of .06 while the standard deviation of the market

Portfolio A has a covariance with Portfolio B of .09 and a covariance with the market of .06 while the standard deviation of the market is 20%. What is the expected return on Portfolio A if the risk free rate is .04 (4%) and the expected return on the market is 12%? Do not enter the % sign. Give your answer as a percentage with accuracy to two decimal places, eg enter 11.00% as 11.00

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

blur-text-image_2

Step: 3

blur-text-image_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

The Financial System Financial Regulation And Central Bank Policy

The Financial System Financial Regulation And Central Bank Policy

Authors: Thomas F. Cargill

1st Edition

1107035678, 9781107035676

More Books

Students also viewed these Finance questions

Question

★★★★★
In Chapter 7, we saw that if the market interest rate, rd, for a given bond increased, the price of the bond would decline. Applying this same logic to stocks, explain (a) How a decrease in risk...

Answered: 1 week ago

Question

★★★★★
If f and g are strictly positive definite and strictly increasing functionals on X, then so is their product fg defined by (fg)(x) = f(x)g(x)

Answered: 1 week ago

Question

★★★★★
If I were my partner, how would I feel about sharing my life with me? Would I think I was supportive? Independent? Interesting? Understanding? An equal partner?

Answered: 1 week ago

Question

★★★★★
Borques Company produces and sells wooden pallets that are used for moving and stackingmaterials. The operating costs for the past year were as follows: Variable costs per unit: Direct materials...

Answered: 1 week ago

Question

★★★★★
(30 points) Say that a variable A in CFG G is necessary if it appears in every derivation of some string wEL(G). Let NECESSARYcP(G, A) A is a necessary variable in G (a) Show that NECESSARYCFG is...

Answered: 1 week ago

Question

★★★★★
On August 8, 2014, Holly purchased a residential apartment building. The cost basis assigned to the building is $800,000. Holly also owns another residential apartment building that she purchased on...

Answered: 1 week ago

Question

★★★★★
Develop a comprehensive analysis that identifies threats and vulnerabilities to the information systems infrastructure and organizational data. You may use a fictitious company, one that you...

Answered: 1 week ago

Question

★★★★★
Samstreet, Inc went public by issuing 1 million shares of common stock at $25 per share. The shares are currently trading at $30 per share. Current risk free rate is 4%, market risk premium is 8% an...

Answered: 1 week ago

Question

★★★★★
On November 12, 2020, Ms. Wilma Vander purchased an automobile to be used exclusively in her newly formed unincorporated business that commenced operations on June 30, 2020. The cost of the...

Answered: 1 week ago

Question

★★★★★
Culture affects our personalities and behaviors. To analyze underlying reasons for bias and the effects on treatment methods, you will be watching a short film that asks what if our normal wasn't...

Answered: 1 week ago

Question

★★★★★
Water, initially at 100 Celsius and 200 kPa, is heated isothermally (yes, this can happen-adiabatic and isothermal are not the same things) until a saturated liquid-plus-vapor mixture having a...

Answered: 1 week ago

Question

★★★★★
Which appraisal problems from this chapter would help to explain the fairness and accuracy issues that sometimes arise in the companys appraisals?

Answered: 1 week ago

Question

★★★★★
Why does Kim Galvin think that, besides the human resources director, only an employee and his or her manager should review the employees performance review? What (if any) is the drawback of not...

Answered: 1 week ago

Question

★★★★★
Discuss how IBM could be saving money by spending $700 million per year on this program.

Answered: 1 week ago

Previous Question Next Question