Business, 13.07.2021 14:00 quinnbee23

Stock X has a 9% expected return, a beta coefficient of 0.8 and a 30% standard deviation of expected returns. Stock Y has a 14% expected return, a beta coefficient of 1.3 and a 20%
standard deviation. The risk-free rate is 5% and the market risk premium is 6.5%.
1.Calculate the coefficient of variation of each stock.
1.1Which stock is riskier than the other stock?
1.2What is the required rate of return of each stock?
1.3Calculate the required return of a portfolio that has RM8,000 invested in Stock X and RM2,000 invested in Stock Y.
1.4If the market risk premium increased to 7%, which of the two stock would have the larger increase in its required return?

Answers: 1

Show answers

Other questions on the subject: Business

Business, 21.06.2019 13:00, Kaitneedshelps

As you start to review the various career options available to you, you will notice that not every career will require what?

Answers: 2

continue

Business, 22.06.2019 10:30, darius7967

True or false: a fitted model with more predictors will necessarily have a lower training set error than a model with fewer predictors.

Answers: 2

continue

Business, 22.06.2019 11:00, littlesami105

Which ranks these careers that employers are most likely to hire from the least to the greatest?

Answers: 2

continue

Business, 22.06.2019 14:50, keishadawson

The following information is needed to reconcile the cash balance for gourmet catering services. * a deposit of $5,600 is in transit. * outstanding checks total $1,000. * the book balance is $6,400 at february 28, 2019. * the bookkeeper recorded a $1,800 check as $17,200 in payment of the current month's rent. * the bank balance at february 28, 2019 was $17,410. * a deposit of $400 was credited by the bank for $4,000. * a customer's check for $3,300 was returned for nonsufficient funds. * the bank service charge is $90. what was the adjusted book balance?

Answers: 1

continue

You know the right answer?

Stock X has a 9% expected return, a beta coefficient of 0.8 and a 30% standard deviation of expecte...