Question
Suppose the historical risk premium for the S&P 500 index is 8% and the standard deviation of S&P returns is 22%. The risk free rate
Suppose the historical risk premium for the S&P 500
index is 8% and the standard deviation of S&P returns is
22%. The risk free rate is 4%.
What is risk premium of Ford stock with beta of 1.10?
GM with beta of 1.25?
What about a portfolio of 50% Ford and 50% GM?
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Study Guide To Accompany Fundamentals Of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus
5th Edition
0073012424, 9780073012421
