please answer both accurely 1 and 7: 1.The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.80 and a residual standard deviation of 30%. Required: a. Calculate the total variance for an increase of 0.25 in its beta. (Do not round intermediate calculations.) b. Calculate the total variance for an increase of 3 percentage points in its residual standard deviation. (Do not round intermediate calculations.) 7. A project has a 0.48 chance of doubling your investment in a year and a 0.52 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
please answer both accurely 1 and 7: 1.The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.80 and a residual standard deviation of 30%. Required: a. Calculate the total variance for an increase of 0.25 in its beta. (Do not round intermediate calculations.) b. Calculate the total variance for an increase of 3 percentage points in its residual standard deviation. (Do not round intermediate calculations.) 7. A project has a 0.48 chance of doubling your investment in a year and a 0.52 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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
please answer both accurely 1 and 7:
1.The standard deviation of the market-index portfolio is 20%. Stock A has a beta of 2.80 and a residual standard deviation of 30%.
Required:
a. Calculate the total variance for an increase of 0.25 in its beta. (Do not round intermediate calculations.)
b. Calculate the total variance for an increase of 3 percentage points in its residual standard deviation. (Do not round intermediate calculations.)
7. A project has a 0.48 chance of doubling your investment in a year and a 0.52 chance of halving your investment in a year. What is the standard deviation of the
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 1 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