Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose the return on the market portfolio is 12.80% and the risk-free rate is 5.30%. If the standard deviation of the market portfolio is
Suppose the return on the market portfolio is 12.80% and the risk-free rate is 5.30%. If the standard deviation of the market portfolio is 16.00%, what is the standard deviation of a stock with an expected return of 13.70%? Assume the stock and the market portfolio are perfectly positively correlated.
Step by Step Solution
★★★★★
3.42 Rating (152 Votes )
There are 3 Steps involved in it
Step: 1
Given the formula for the standard deviation of the portfolio p w2 m2 w2 s2 2 w m s We calculated ...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Essentials Of Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
7th Edition
0073382469, 978-0073382463
