Wipro provides you the following information's. Calculate the expected rate of return of an asset Expected market retum 15% Risk-free rate of return 9% Standard deviation of an asset 2.4% Market Standard deviation 2.0% 8 Correlation co-efficient of portfolio with market 0.9
Wipro provides you the following information's. Calculate the expected rate of return of an asset Expected market retum 15% Risk-free rate of return 9% Standard deviation of an asset 2.4% Market Standard deviation 2.0% 8 Correlation co-efficient of portfolio with market 0.9
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question four
Wipro provides you the following information's. Calculate the expected rate of return of an asset
Expected market return 15%
Risk-free rate of return 9%
Standard deviation of an asset 2.4%
Market Standard deviation 2.0%
Correlation co-efficient of portfolio with market 0.9
Question five
Share of ABE Ple has a beta of 1.5, the risk free rate of retum is 5% and the market expected
return is 9%. You want invest ABE Plc shares and the expected return from share is 11%. Is the
share overpriced according to CAPM?
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Follow-up Question
Consider two assets with expected return R1=0.22,R2=0.55and variance are s1=0.80, s2=0.88 and r12=0.55 respectively.A portifolio with weights W1=0.25 and W2= 0.65 is formed calculate the expected return and variance of the portifolio
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by Bartleby ExpertFollow-up Question
Consider two assets with expected return R1=0.22,R2=0.55and variance are s1=0.80, s2=0.88 and r12=0.55 respectively.A portifolio with weights W1=0.25 and W2= 0.65 is formed calculate the expected return and variance of the portifolio
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