Standard deviation of the return on the market portfolio

Assignment Help Financial Management
Reference no: EM13881005

Suppose the CAPM is true and you observe the following: Beta(i)=2. In a regression of Er(i) on Er(m), the R squared= 0.8 and the idiosyncratic variance of asset (i) is 25%. What is the standard deviation of the return on the market portfolio?

Reference no: EM13881005

Questions Cloud

How well does either trend fit the data : Using the years 1975 to 2006 (and denoting the time variable by the integers 1 to 32 for simplicity), estimate the linear time trend of housing prices. Use the same data to estimate an exponential trend. How well does either trend fit the data?
Which of following forbids sex discrimination regarding pay : Which of the following forbids sex discrimination regarding pay? Which type of intellectual property protects books, movies, and artwork
Leased office space under a three year operating lease : 1.On January 1, 2013, Winn Heat Transfer leased office space under a three year operating lease agreement.
Create access lists to restrict traffic between departments : Create access lists to restrict traffic between departments. The HR and Payroll departments both reside in the same building. The company has devised a new benefits system.
Standard deviation of the return on the market portfolio : Suppose the CAPM is true and you observe the following: Beta(i)=2. In a regression of Er(i) on Er(m), the R squared= 0.8 and the idiosyncratic variance of asset (i) is 25%. What is the standard deviation of the return on the market portfolio?
Builders constructed the warehouse at a cost : Builders constructed the warehouse at a cost of $2.5 million.
What is the current total value : Beach & Company reported net income of $40 million for last year. Depreciation expense totaled $18 million and capital expenditures came to $8 million. Free cash flow is expected to grow at a rate of 5% for the foreseeable future. What is the current..
Compute multiple-regression equation estimating : Compute a multiple-regression equation estimating a typical home's sales price based on the various improvements.
What is your payoff per contract is the stock price : You have written a put option on XYZ Corporation common stock. The option has an exercise price of $22.3 and an option premium of $1.94 per share. What is your payoff per contract is the stock price is $40 at expiration?

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is the total risk-weighted-assets for credit risk

How much Tier 1 and Tiear 2 capital is required? How does this compare with the capital required under the Basel II standardized approach and under Basel I?

  Calculate the expected return of the fund

The Successful Mutual Fund’s beta is 1.4 and the market risk premium is 6.5% and the return in the market is 12%. Calculate the expected return of the fund? (Hint: need to find the risk free rate first, then calculate the return). (14.6%)

  Calculating a bid price

Consider a project to supply 103 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,930,000 five years ago; if the land were sold today, it would net you $2,130,0..

  The annual provision for bad debt is recorded

The annual provision for bad debt is recorded as 5% of ending A/R (317,420). Use the allowance method. Round to the nearest $1. Interest has accrued at 6.5% on the long-term notes payable (1,200,000) since July 1 of this year.

  Current ratio-debt ratio-profit margin-total asset turnover

A company has got $500 in cash and cash equivalents, $300 in inventory and $200 in account receivables. The firm has long term assets of $500. The firm has accounts payables of $200. All other current liabilities total $400. The firm had sales of $10..

  The present value of one credit card to the bank

First National Bank has a credit card department. The average cardholder charges $600 a month, and pays off the entire balance 60 days after the purchase. The cardholders do not pay any interest, but they do pay $25 membership fee, in advance, every ..

  First putting green championship was held

In 1895, the first Putting Green Championship was held. The winner’s price money was $240. In 2014, the winner’s check was $1,400,000. What was the percentage in cream per year in the winner's check over this period? If the winner’s prize increases a..

  What should be the hedge ratio

What are its intrinsic values at stock prices of $45 and $38, respectively, and what should be the hedge ratio and what should be the value of the hedged portfolio at expiration

  What is internal rate of return on this new plant

Microwave Oven Programming, Inc is considering the construction of a new plant. The plant will have an initial cash outlay of $7.1 million (= -$6.1 million), and will produce cash flows of $2.3 million at the end of year one, $4.5 million at the end ..

  The dauten toy corporation currently uses an injection

the dauten toy corporation currently uses an injection molding machine that was purchased 2 years ago.nbsp this machine

  Usually the members of a limited liability company

Usually the members of a limited liability company:

  Standard deviation of the portfolios excess returns

If a portfolio had a return of 15%, the risk-free asset return was 5%, and the standard deviation of the portfolio's excess returns was 30%, the Sharpe measure would be ______ .

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd