Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following three stocks are available in the market: E(R) Stock A 10.9 % 1.18 Stock B 12.8 .98 Stock C 15.3 1.38 Market 14.3

The following three stocks are available in the market:

E(R)
Stock A 10.9 % 1.18
Stock B 12.8 .98
Stock C 15.3 1.38
Market 14.3 1.00

Assume the market model is valid.

The return on the market is 15.1 percent and there are no unsystematic surprises in the returns. What is the return on each stock? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Return
Stock A n/r %
Stock B n/r %
Stock C n/r %

Assume a portfolio has weights of 35 percent Stock A, 50 percent Stock B, and 15 percent Stock C. The return on the market is 15.1 percent and there are no unsystematic surprises in the returns. What is the return on the portfolio? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Return on the portfolio n/r %

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

Contemporary Financial Management

Authors: R. Charles Moyer, William J. Kretlow, James R. Mcguigan

7th Edition

0538877766, 9780538877763

More Books

Students also viewed these Finance questions

Question

2. Be sure to make eye contact with the students.

Answered: 1 week ago

Question

What other blunt questions do you think would be appropriate?

Answered: 1 week ago