FREE Trial S
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the risk-free rate is 4.1 percent and the market portfolio has an expected return of 12.6 percent. The market portfolio has a variance of

Suppose the risk-free rate is 4.1 percent and the market portfolio has an expected return of 12.6 percent. The market portfolio has a variance of 0.0465. Portfolio Z has a correlation coefficient with the market of 0.36 and a variance of 0.1831.

According to the CAPM, what is the expected return on portfolio Z? (Round your answer to 2 decimal places. Do not round your intermediate calculations.)

Expected return= %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Market Wizards Updated Interviews With Top Traders

Market Wizards Updated Interviews With Top Traders

Authors: Jack D. Schwager

1st Edition

ISBN: 1118273052, 978-1118273050

More Books

Students also viewed these Finance questions

Question

★★★★★
The following information has been obtained for the Gocker SA. 1. Prior to 2018, taxable income and pretax financial income were identical. 2. Pretax financial income is 1,700,000 in 2018 and...

Answered: 1 week ago

Question

★★★★★
Answer uie questions in the table below about this molecule

Answered: 1 week ago

Question

★★★★★
2. What does it mean to view culture as transacted?

Answered: 1 week ago

Question

★★★★★
Presented below are selected transactions at Ridge Company for 2015. Jan. 1 Retired a piece of machinery that was purchased on January 1, 2005. The machine cost $62,000 on that date. It had a useful...

Answered: 1 week ago

Question

★★★★★
Suppose the risk-free rate is 4.1 percent and the market portfolio has an expected return of 12.6 percent. The market portfolio has a variance of 0.0465. Portfolio Z has a correlation coefficient...

Answered: 1 week ago

Question

★★★★★
Ch 10: Apply What You've Learned - Managing Property and Liability Risk Scenario: You own a home with a market value of $175,000. Of this amount, $50,000 is apportioned to the land and $125,000 is...

Answered: 1 week ago

Question

★★★★★
The generalized Bernoulli equation for unsteady flows can be expressed as \[ \frac{P_{1}}{ho g}+z_{1}=\frac{V^{2}}{2 g}+\frac{1}{g} \int_{1}^{2} \frac{\partial V}{\partial t} d s+h_{L} \] If the...

Answered: 1 week ago

Question

★★★★★
Solve Prob. 1-24 using appropriate software. Print out the entire solution, including the numerical results with proper units. Data From Problem 1-24: A 10-kg rock is thrown upward with a force of...

Answered: 1 week ago

Question

★★★★★
Air flows through a converging-diverging nozzle. The Mach number of airflow at the inlet of the nozzle is \(M_{1}=0.75\), and the air condition is that at sea level at the inlet. The Mach number of...

Answered: 1 week ago

Question

★★★★★
Use Table 1.1 to find the three most open economies in 2009, and the three most closed. How does the growth performance of these countries compare with the growth of the average country in the table?...

Answered: 1 week ago

Question

★★★★★
The project manager of the gas station project shown in Figure 7.3 needs to change the projects WBS so that it can be compared with cost and productivity information collected by the company. Level...

Answered: 1 week ago

Previous QuestionNext Question