Question
Stocks A and B had the following returns: What was the standard deviation of each stock? Y ear Stock A Stock B 1 9% 6%
Stocks A and B had the following returns:
What was the standard deviation of each stock?
Y ear | Stock A | Stock B |
1 | 9% | 6% |
2 | 12% | 8% |
3 | -4% | -1% |
4 | 1% | 5% |
A. | Stock A: 0.073, Stock B: 0.039; |
B. | Stock A: 0.037, Stock B: 0.039; |
C. | Stock A: 0.073, Stock B: 0.052; |
D. | Stock A: 0.073, Stock B: 0.073; |
You have learned that the beta of A is 1.3 while the beta of B is 0.5. The risk-free rate is 3%.What are the required rate of returns (RRR) of A and B if the expected return to the market is 10%?(hint: CAMP formula)
A. | Stock A: 12.1%, Stock: 6.5%; | |
B. | Stock A: 16%, Stock: 8%; | |
C. | Stock A: 16%, Stock: 6.5%; | |
D. | Stock A: 13%, Stock: 8%; |
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