Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 9 (2 points) A linear regression was done to estimate the relation between Sprint's stock returns and the market's return. The intercept of the

image text in transcribed
Question 9 (2 points) A linear regression was done to estimate the relation between Sprint's stock returns and the market's return. The intercept of the line was found to be 0.23 and the slope was 1.75. Which of the following statements is TRUE regarding Sprint's stock? Sprint's beta is 1.75. Sprint's beta is between 0.23 and 1.47 Sprint's beta is 1.52. Sprint's beta is 0.23. Sprint's beta is 1.47. Question 10 (2 points) Loblaw's stock has a beta of 0.9, while Bombardier stock has a beta of 1.35. If the risk-free rate is 8%, and the market risk premium is 2%, what is the expected return on a portfolio with equal holdings of Loblaw's and Bombardier? 9.25% 10.25% 11% 13.25%

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

School Finance A Policy Perspective

Authors: Allan Odden, Lawrence Picus

5th Edition

0078110289, 978-0078110283

More Books

Students also viewed these Finance questions