What are the beta of stock x and stock y

Assignment Help Financial Management

Reference no: EM131997473

Stock X is lying on the SML and its expected return in the market is 10%. Stock Y is 1.5% above the SML and its expected return in the market is 8%. The standard deviation of the market portfolio and Stock X are 12% and 22% respectively. The market price of risk is 5% and the risk-free return is 2%.

a) What are the beta of Stock X and Stock Y?

b) What are the systematic risk and unsystematic risk of Stock X? Please answer in %^2.

c) What is the correlation coefficient and covariance between Stock X and market portfolio?

d) Assume you form a portfolio comprises 60% in Stock X and 40% in market portfolio, what are the systematic risk and variance of the portfolio? Please answer in %^2.

Reference no: EM131997473

Questions Cloud

What effect would you expect each of the calculations : What effect would you expect each of the calculations you performed to have in terms of shareholder value?

Determine the price be in three years : If investors require a return of 10.5 percent on The Jackson-Timberlake Wardrobe Co. stock, what is the current price?

American political culture : How is this possible when we are a country made up of immigrants? Is this similar to nationalism? Advantages and disadvantages?

Every year citizens gets involved in helping the community : For centuries people had been voting for the presidency and for political process. Every year citizens gets involved in helping the community

What are the beta of stock x and stock y : Stock X is lying on the SML and its expected return in the market is 10%. Stock Y is 1.5% above the SML and its expected return in the market is 8%.

How the supreme court justices take position : How is the Supreme Court affected by party influence or how the Supreme Court Justices take their position?

Calculate the probability that in sell for more than : A stock sells today for $45. The price of the stock in a year is expected to be $50. The annual he volatility of the stock is 25%.

Compute the expected return on lauren computer stock : A stockbroker calls you and suggests that you invest in the Lauren Computer Company. After analyzing the firm' s annual report and other material.

What is the concept of middle class measuring rod : Definition as well as a description of its significance for the idea of youth crime and justice.

User Account

All Pages