Question
Stock A has a beta of 1.2 and a standard deviation of 20% stock B has a beta of 0.8 and staderd deviation of %25
Stock A has a beta of 1.2 and a standard deviation of 20% stock B has a beta of 0.8 and staderd deviation of %25 .Protfolio P has $200,000 consisting of $100,000 invested in stock A and $100,000 in stock B . which of the folloing statement is Correct ? ( Assume that the stocks are in equilibrium )
1) Stock A's return are less highly correlated with the return on most other stocks than B's return
2) Stock B has a higher required rate of return than stock A
3) Porfolio P has a standard deviation of 22.5%
4) More information is needed to determine the protfolio's beta
5) Protfolio P has a beta of 1.0
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