7. You have been provided with the following data on three firms and the market:SecurityFirm AFirm BFirm CThe MarketThe risk-free assetFill in the missing values (i-vi) in the table.Oi0.12[ii]0.240.100.01Pi,M[i]0.40.75[iv]0Bi0.901.10[iii][v][vi]

Given Standard deviation of firm A=0.12Beta of Firm A=0.90Standard deviation of…

7. You have been provided with the following data on three firms and the market: Security Oi Firm A 0.12 Firm B [ii] Firm C 0.24 The Market 0.10 The risk-free asset 0.01 Fill in the missing values (i-vi) in the table. Pi,M [i] 0.4 0.75 [iv] 0 Bi 0.90 1.10 [iii] [v] [vi]

7. You have been provided with the following data on three firms and the market: Security Oi Firm A 0.12 Firm B [ii] Firm C 0.24 The Market 0.10 The risk-free asset 0.01 Fill in the missing values (i-vi) in the table. Pi,M [i] 0.4 0.75 [iv] 0 Bi 0.90 1.10 [iii] [v] [vi]

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

7. You have been provided with the following data on three firms and the market:
Security
Firm A
Firm B
Firm C
The Market
The risk-free asset
Fill in the missing values (i-vi) in the table.
Oi
0.12
[ii]
0.24
0.10
0.01
Pi,M
[i]
0.4
0.75
[iv]
0
Bi
0.90
1.10
[iii]
[v]
[vi]

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Step 1: Calculation of correlation between firm A and market

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Step 2: CALCULATION OF STANDARD DEVIATION OF FIRM B

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Step 3: Calculation of Beta of Firm C

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Step 4: Correlation between market and market

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Step 5: Beta of market portfolio

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Step 6: Beta of risk free asset

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