Question
The following are estimates for 2 stocks. Stock Expected ret. beta firm-specific variance, or Var(e) A 13% 0.9 0.32 B 18% 2.0 0.45 The market
The following are estimates for 2 stocks.
| Stock | Expected ret. | beta | firm-specific variance, or Var(e) |
| A | 13% | 0.9 | 0.32 |
| B | 18% | 2.0 | 0.45 |
The market index has a standard deviation of 0.23, and the risk-free rate if 0.05
What is the standard deviation of stock A's return?
Step by Step Solution
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To calculate the standard deviation of stock As return we can use the formula for the ...
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
9th Edition
73530700, 978-0073530703
