subject
Business, 12.12.2019 20:31 memorybuxton

Your friend is considering adding one additional stock to a 3-stock portfolio, to form a 4-stock portfolio. she is highly risk averse and has asked for your advice. the three stocks currently held all have b = 1.0, and they are perfectly positively correlated with the market. potential new stocks a and b both have expected returns of 15%, are in equilibrium, and are equally correlated with the market, with r = 0.75. however, stock a's standard deviation of returns is 12% versus 8% for stock b. which stock should this investor add to his or her portfolio, or does the choice not matter? a. stock a. b. stock b. c. neither a nor b, as neither has a return sufficient to compensate for risk. d. add a, since its beta must be lower. e. either a or b, i. e., the investor should be indifferent between the two.

ansver
Answers: 2

Other questions on the subject: Business

image
Business, 22.06.2019 04:00, brucewayne8499
Consider the market for gasoline. suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon, and employees at gas stations earn $17.50 per hour. complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it results in a shortage or a surplus or has no effect on the price and quantity that prevail in the market. statement price control effect the government has instituted a legal minimum price of $3.40 per gallon for gasoline. the government prohibits gas stations from selling gasoline for more than $3.40 per gallon. due to new regulations, gas stations that would like to pay better wages in order to hire more workers are prohibited from paying more than $14.50 per hour.
Answers: 2
image
Business, 22.06.2019 10:20, jjimenez0276
Asmartphone manufacturing company uses social media to achieve different business objectives. match each social media activity of the company to the objective it the company achieve.
Answers: 2
image
Business, 22.06.2019 19:30, dfrtgyuhijfghj4794
About 20 years ago, sturdy light, inc., produced a sturdy, lightweight backpack in a market that was rapidly growing. sturdy light became a leader in this market. eventually, the backpack market reached the maturity stage and slowed down. however, by this time, sturdy light had developed a strong brand name and continued to steadily lead the market. which of the following describes this scenario? a. sturdy light was a star that developed into a cash cow. b. sturdy light was a question mark that developed into a star. c. sturdy light was a dog that developed into a question mark. d. sturdy light was a cash cow that developed into a star.
Answers: 2
image
Business, 22.06.2019 19:30, taylorray0820
Which of the following statements are false regarding activity-based costing? non-manufacturing costs are important to include when calculating the cost of each product. costs are allocated based on a pre-determined overhead rate. transitioning from traditional costing methods to activity-based costing can be complicated and costly. activity-based costing follows the same basic calculation methods as traditional costing approaches. none of the above
Answers: 2
You know the right answer?
Your friend is considering adding one additional stock to a 3-stock portfolio, to form a 4-stock por...

Questions in other subjects:

Konu
Computers and Technology, 27.02.2022 03:30