FIGURE 12.11 Monthly rates 40% of return for (a) Marathon Oil, (b) Intel, and (c) Walmart, plus the market portfolio for the five years (a) 30% ending December 2017 20% 10% 10% -10% -5% 5% -20% Beta 2.39 Std dev 43.7 % -30 % 30%-T (b) 25%+ 20%+ 15%- 10% 5% 506 -10% 10% -5% 5% 10% Beta 1.07 -15% Std dev 20.5% -20% Market return (%) FIGURE 12.11 (continued) 30% (c) 25% 20% 15% 10% 5% t. -5% Op 5% 5% -10% 10% -10% -15% Beta = 37 Std dev 16.4% -20 % Market return (%) Return on Walmart Marathon Oil return (%) Intel retum (%)
FIGURE 12.11 Monthly rates 40% of return for (a) Marathon Oil, (b) Intel, and (c) Walmart, plus the market portfolio for the five years (a) 30% ending December 2017 20% 10% 10% -10% -5% 5% -20% Beta 2.39 Std dev 43.7 % -30 % 30%-T (b) 25%+ 20%+ 15%- 10% 5% 506 -10% 10% -5% 5% 10% Beta 1.07 -15% Std dev 20.5% -20% Market return (%) FIGURE 12.11 (continued) 30% (c) 25% 20% 15% 10% 5% t. -5% Op 5% 5% -10% 10% -10% -15% Beta = 37 Std dev 16.4% -20 % Market return (%) Return on Walmart Marathon Oil return (%) Intel retum (%)
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 26SP
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Figure 12.11 shows plots of monthly
d. Consider a well-diversified portfolio made up of stocks with the same beta as Intel. What are the beta and standard deviation of this portfolio’s return? The standard deviation of the market portfolio’s return is 20%.
e. What is the expected rate of return on each stock? Use the
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