Under the following conditions, what are the expected returns for stocks A and B? $$\begin{array} { l l }
\lambda ^ { 0 } = 0.035 & b _ { \mathrm { a } , 1 } = 1.00 \
\mathrm { k } _ { 1 } = 0.05 & \mathrm {~b} _ { \mathrm { a } , 2 } = 1.40 \
\mathrm { k } _ { 2 } = 0.06 & \mathrm {~b} _ { \mathrm { b } , 1 } = 1.70 \
& \mathrm {~b} _ { \mathrm { b } , 2 } = 0.65
\end{array}$$
A)14.8% and 13.8%
B)19.8% and 29.5%
C)16.0% and 19.8%
D)16.9% and 15.9%
E)None of the above

Question

Under the following conditions, what are the expected returns for stocks A and B? $$\begin{array} { l l } 
\lambda ^ { 0 } = 0.035 & b _ { \mathrm { a } , 1 } = 1.00 \
\mathrm { k } _ { 1 } = 0.05 & \mathrm {~b} _ { \mathrm { a } , 2 } = 1.40 \
\mathrm { k } _ { 2 } = 0.06 & \mathrm {~b} _ { \mathrm { b } , 1 } = 1.70 \
& \mathrm {~b} _ { \mathrm { b } , 2 } = 0.65
\end{array}$$
A)14.8% and 13.8%
B)19.8% and 29.5%
C)16.0% and 19.8%
D)16.9% and 15.9%
E)None of the above

Quizplus · Accepted Answer

The Answer of Under the following conditions, what are the expected returns for stocks A and B? $$\begin{array} { l l } 
\lambda ^ { 0 } = 0.035 & b _ { \mathrm { a } , 1 } = 1.00 \
\mathrm { k } _ { 1 } = 0.05 & \mathrm {~b} _ { \mathrm { a } , 2 } = 1.40 \
\mathrm { k } _ { 2 } = 0.06 & \mathrm {~b} _ { \mathrm { b } , 1 } = 1.70 \
& \mathrm {~b} _ { \mathrm { b } , 2 } = 0.65
\end{array}$$
A)14.8% and 13.8%
B)19.8% and 29.5%
C)16.0% and 19.8%
D)16.9% and 15.9%
E)None of the above

Under the Following Conditions, What Are the Expected Returns for Stocks