Stock X has a beta of 0.7 and Stock Y has a beta of 1.3.The standard deviation of each stock's returns is 20%.The stocks' returns are independent of each other,i.e. ,the correlation coefficient,r,between them is zero.Portfolio P consists of 50% X and 50% Y.Given this information,which of the following statements is CORRECT?
A) Portfolio P has a standard deviation of 20%.
B) The required return on Portfolio P is equal to the market risk premium (rM - rRF) .
C) Portfolio P has a beta of 0.7.
D) Portfolio P has a beta of 1.0 and a required return that is equal to the riskless rate,rRF.
E) Portfolio P has the same required return as the market (rM) .
Correct Answer:
Verified
Q82: Assume that the risk-free rate is 5%.Which
Q83: Assume that the risk-free rate remains constant,but
Q84: Stock A has a beta of 1.2
Q85: Which of the following statements is CORRECT?
A)
Q86: Assume that the risk-free rate is 6%
Q88: Stock A has a beta of 0.7,whereas
Q89: Stock HB has a beta of 1.5
Q90: During the coming year,the market risk premium
Q91: Stock A has a beta of 0.8
Q92: Nile Food's stock has a beta of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents