Question
The current prices of stock A and B today are $75 and $45, respectively. Both stocks are non-dividend paying. Market information on stocks A and
The current prices of stock A and B today are $75 and $45, respectively. Both stocks are non-dividend paying. Market information on stocks A and B next year is reported in the table below.
| Probability | Recession Pr = .2 | Normal Pr = .6 | Expansion Pr = .2
| Correlation with the Market |
| Stock A Price | 64 | 87 | 97 | .7 |
| Stock B Price | 36 | 52 | 64 | .24 |
- Assuming that the market portfolio has a standard deviation of .18, determine which stock has a higher systematic risk. Which one has a higher unsystematic risk?
What is the beta of a portfolio representing 70% in stock A and 30% in Stock B?
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Unlock The Potential Of Forex An Essential Guide To Forex Trading
Authors: Enoch Grennan
1st Edition
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