Expected return on portfolio 2 Line (capital market line) II Y Line 35% in risk-free asset -40% in risk-free asset 65% in stocks represented by Q 140% in stocks represented by Q Risk-free rate (Rp) 70% in risk-free asset 30% in stocks represented by Standard deviation of portfolio's return Portfolio Q is composed of 30 percent AT&T, 45 percent GM, and 25 percent IBM.
Expected return on portfolio 2 Line (capital market line) II Y Line 35% in risk-free asset -40% in risk-free asset 65% in stocks represented by Q 140% in stocks represented by Q Risk-free rate (Rp) 70% in risk-free asset 30% in stocks represented by Standard deviation of portfolio's return Portfolio Q is composed of 30 percent AT&T, 45 percent GM, and 25 percent IBM.
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
Related questions
Question
Based on this image, how many stocks does it take to eliminate most of the diversifiable risk?
Transcribed Image Text:Expected return
on portfolio
2
Line (capital market line)
II
Y
Line
35% in risk-free asset -40% in risk-free asset
65% in stocks
represented by Q
140% in stocks
represented by Q
Risk-free
rate (Rp)
70% in risk-free asset
30% in stocks
represented by
Standard
deviation
of portfolio's
return
Portfolio Q is composed of 30 percent AT&T, 45 percent GM, and 25 percent IBM.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education