(11) Assume that the capital market line is as follows: 4,00 + 13,5B Comment on whether each of the securities is overvalued or undervalued if returns of the securities are as follows: Security Return 20 20 A 50 D 25 E 31
(11) Assume that the capital market line is as follows: 4,00 + 13,5B Comment on whether each of the securities is overvalued or undervalued if returns of the securities are as follows: Security Return 20 20 A 50 D 25 E 31
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Please solve iii.
Transcribed Image Text:(111)
Assume that the capital market line is as follows:
4,00 + 13,5ß
Comment on whether each of the securities is overvalued or undervalued if returns of
the securities are as follows:
Security
A
Return
20
20
50
25
E
31
Transcribed Image Text:(b)
A portfolio consists of securities as follows:
Average buying
price (RM)
4.00
8.00
Security
Beta
Units
Current market
price (RM)
4.80
9.60
1.3
30,000
10,000
80,000
200,000
150,000
A
1.2
1.3
1.5
1.20
0.50
0.20
3.20
0.30
D
E
1.6
0.10
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