Portfolio containing several individual stocks

Assignment Help Financial Management

Reference no: EM131180511

You are assigned the task of computing the expected return on a portfolio containing several individual stocks. Which one of the following statements is correct concerning this task?

The summation of the return deviation from the portfolio expected return for each economic state must equal zero.

The portfolio beta must be 1.0.

The arithmetic average of the betas for each security held in the portfolio must equal 1.0.

The standard deviation of the portfolio must equal 1.0.

The expected rate of return on the portfolio must be positive.

Reference no: EM131180511

Questions Cloud

University of phoenix material-corporate expansion proposal : Resource: University of Phoenix Material: Corporate Expansion Proposal Research and analyze foreign exchange rates and markets for the country you have chosen.

A penetration pricing strategy and a skimming price strategy : What is the difference between a penetration pricing strategy and a skimming price strategy? - Under what circumstances would each be used?

Why you have a negative evaluation of the theory area : Discuss why you have a negative evaluation of the theory area. In addition, state what you believe the theory effectively accomplishes. Discuss what you would write to the FASB if you had the opportunity to suggest a modification, etc., of the theo..

Evaluation and analysis of secondary sources : BLB1114 LEGAL RESEARCH METHODS ASSESSMENT. The adversarial process inhibits judicial creativity. Courts are not Law Reform Commissions. They do not select the questions they will decide; and in general they do not gather information extraneous to t..

Portfolio containing several individual stocks : You are assigned the task of computing the expected return on a portfolio containing several individual stocks. Which one of the following statements is correct concerning this task?

After-tax cash flow effect from deprecation : What is the after-tax cash flow effect from deprecation of switching to the new food maker for EHC if the company's tax rate is 30 percent and the correct discount rate is 12 percent?

Review companies of interest in areas of operations : Select and review Operations and Supply / Value Chain as well as the global competitive landscape for one company in your industry using the IBISWorld and Mergent Online databases found in the University Library along with official company report..

What is the overall value of the levered firm : The unlevered firm expects to earn $250,000 in net operating income each year for the foreseeable future. It has a tax rate of 40% and has a capitalization rate of 8% equal to the industry required return for this type of firm. With all benefits and ..

User Account

All Pages