User Account

All Pages

What is the beta of portfolio p

Assignment Help Business Management
Reference no: EM131235480

Problem 1:

Suppose the return on portfolio P has the following probability distribution:

Bear Market

Normal market

Bull market

Probability

0.2

0.5

0.3

Return on P

-20%

18%

50%

Assume that the risk-free rate is 9%, and the expected return and standard deviation on the market portfolio M is 0.19 and 0.20, respectively. The correlation coefficient between portfolio P and the market portfolio M is 0.6.

Answer the following questions:

  • Is P efficient?
  • What is the beta of portfolio P?
  • What is the alpha of portfolio P? Is P overpriced or underpriced?

Reference no: EM131235480

Questions Cloud

Dividend received on investments : While preparing the ‘Cash Flow Statement' the accountant of Gulfam Ltd., a financing company showed ‘Dividend received on Investments' on ‘Investing Activity'. Was he correct in doing so? Give reasons.
Explain key factors that you believe to be most influential : When deciding whether or not to outsource offshore, list the key factors aside from maximizing profits that managers should consider. Determine the key factors that you believe to be the most influential.
Describe the changes that you believe american colleges : What are your experiences and accomplishments in developing, building, and managing cutting-edge, comprehensive learning, personal development, student leadership, and responsible citizenship programs? (Specific examples - clarify the win for each..
How many standard hours are needed to run an order : How many standard hours are needed to run an order of 200 pieces if the setup time is 1.3 hours and the run time 0.3 hours per piece? How many actual hours are needed at the work center if the efficiency is 130% and the utilization is 70%?
What is the beta of portfolio p : Is P efficient? What is the beta of portfolio P? What is the alpha of portfolio P? Is P overpriced or underpriced?
Calculate the utilization efficiency : A study undertaken by the materials management department found that over the past year the work center was available for work 12,000 hours, work was actually being done for 10,000 hours, and work was performed 11,480 standard hours. Calculate the..
Explain elasticity of demand for product within the industry : Analyze the elasticity of demand for products within the selected industry relevant to Katrina's Candies. Determine the factors involved in making decisions about pricing these products that you believe to be the most influential.
Estimate the beta for your equity : Estimate the beta for your equity if projects have constant betas, but your firm will carry a debt/equity ratio of 1/2.
What is the demonstrated weekly capacity of the work center : A work center consisting of 3 machines operates 40 hours a week. In a 4-week period, it actually worked 360 hours and produced 468 standard hours of work. Calculate the utilization and efficiency of the work center. What is the demonstrated weekly..

Reviews

Write a Review

Business Management Questions & Answers

  Evaluate the ongoing success of a winery

Establishes a system to evaluate the ongoing success of a winery that a operates a restaurant  and service as the marketplace and company dynamics evolve.

  Description of the organization and its primary stakeholder

A description of the organization and its primary stakeholders. Include the vision and mission statement if they are available to the public, and the code of ethics if the company has one (if it is long, an excerpt or description is an acceptab..

  Difference between entering into a long forward contract

What is the difference between entering into a long forward contract when the forward price is $50 and taking a long position in a call option with a strike price of $50?

  Ethics and social responsibility at new belgium brewing

Describe the role of ethics and social responsibility at New Belgium Brewing? How has ethics and social responsibility helped to position the Fat Tire brand at New Belgium

  Discuss - listening skills

How can you improve your personal listening skills? Use at least one resource to support your key points.

  Describe most-efficient competitor cost-less ceramics

Durable Ceramics Inc delivers inexpensive ceramic tile to builders of institutional buildings such as schools prisons as well as public administration buildings

  Determining the yield to maturity

Question 1: If a bond is purchased at a price below the face value, the yield to maturity is:

  Designing effective physical security

Outline three parameters that should be considered when designing and implementing physical security into the information protection scheme. Suggest two activities that could be performed to address these parameters and explain how.

  Case study of amazon

Online retail pioneer Amazon.com has built a profitable $24.5 billion business by paying close attention to pricing details. Founded as a web-based bookstore with discount prices, Amazon has since expanded into dozens of product categories and cou..

  Describe capabilities of database management systems

PM304 Describe capabilities of database management systems and evaluate the challenges and benefits of data management systems

  Illustrate what assumptions or approximations are necessary

Illustrate what assumptions or approximations are necessary to treat this model as a deterministic model? are these assumptions acceptable to you?

  Financial measures used by two healthcare firms

Compare and contrast 4 common financial measures used by two healthcare firms. (Hint: In the library, consult LexisNexis Academic to find financial information for the healthcare organizations you choose.)

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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