+1-415-670-9189
info@expertsmind.com
Standard deviation-portfolio-stock beta
Course:- Financial Management
Reference No.:- EM13942972





Assignment Help >> Financial Management

In isolation, stock A’s standard deviation ( σ ) = 10%, stock B’s σ = 15%, and stock C’s σ = 20%. In a portfolio, stock A’s beta ( β ) = 2, stock B’s β = 1.5, and stock C’s β = 1.0. Which of the following is true?

In isolation, B is riskier than C, in a portfolio, C is riskier than A, in a portfolio, B is riskier than C, in isolation, A is riskier than B




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Mullineaux Corporation has a target capital structure of 62 percent common stock, 7 percent preferred stock, and 31 percent debt. Its cost of equity is 12.7 percent, the cost
Which of the following statements is true in a market in which no arbitrage opportunities are available? I. A long forward for delivery in one year at $100 is worth more than
For an individual planning to retire in ten years, with a thirty-year life expectancy in retirement, and with living expenses that will grow with inflation, what is the risk-f
A trader creates a long butterfly spread from options with strike prices $60, $65, and $70 by trading a total of 400 options. The options are worth $11, $14, and $18. What is
Your firm has net income of $338 on total sales of $1,420. Costs are $780 and depreciation is $120. The tax rate is 35 percent. The firm does not have interest expenses. What
Investment Bankers Association (IBA) has an agreement with Northern Airlines to underwrite an equity issue with a market value equal to $11 million. a) If IBA's underwriting f
Treasury bonds paying an 7.00% coupon rate with semiannual payments currently sell at par value. What coupon rate would they have to pay in order to sell at par if they paid t
A company has net income of $185,000, a profit margin of 8.4 percent, and an accounts receivable balance of $124,370. Assuming 70 percent of sales are on credit, what is the c