Question
The expected rate of return on stock XYZ is 14%, while the expected re- turn of the market portfolio is 11%. The risk-free rate is
The expected rate of return on stock XYZ is 14%, while the expected re- turn of the market portfolio is 11%. The risk-free rate is 5%. The volatility of XYZ is 20%, and the volatility of the market portfolio is 10%.
a. What are the M2 measures for XYZ and the market portfolio?
b. Suppose the alpha for stock XYZ is 5%. What is the Treynor measure for stock XYZ?
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Essential Finance Guide
Authors: DK Publishing
1st Edition
078948157X, 978-0789481573
