Question
Suppose that the index model for stocks A and B is estimated from excess returns with the following results: R A = 2.60% + 0.90
Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 2.60% + 0.90RM + eA RB = -2.00% + 1.20RM + eB M = 26%; R-squareA = 0.21; R-squareB = 0.12 Assume you create portfolio P with investment proportions of 0.70 in A and 0.30 in B. a. What is the standard deviation of the portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)
b. What is the beta of your portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)
c. What is the firm-specific variance of your portfolio? (Do not round your intermediate calculations. Round your answer to 4 decimal places.)
d. What is the covariance between the portfolio and the market index? (Do not round your intermediate calculations. Round your answer to 3 decimal places.)
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Who Is Your Competition You Real Estate Wholesaling Questions Answers And Tools To Help Beginners Crush Their Fears And Stop Procrastinating
Authors: Nick Zalonis
1st Edition
1716097193, 978-1716097195
