Stocks A and B have the following returns: (Click on the following icon in order to copy its contents into a spreadsheet.) Stock A Stock B 1 0.09 0.06 2 0.04 0.03 3 0.14 0.03 4 −0.02 0.02 5 0.07 −0.04 b. What are the standard deviations of the returns of the two stocks? If their correlation is 0.45, what is the expected return and standard deviation of a portfolio of 57%stock A and 43% stock B?

Stocks A and B have the following returns: (Click on the following icon in order to copy its contents into a spreadsheet.) Stock A Stock B 1 0.09 0.06 2 0.04 0.03 3 0.14 0.03 4 −0.02 0.02 5 0.07 −0.04 b. What are the standard deviations of the returns of the two stocks? If their correlation is 0.45, what is the expected return and standard deviation of a portfolio of 57%stock A and 43% stock B?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 6P

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answer all three subparts
The index model has been estimated for stock A with the following results: RA = 0.01 + 1.2RM + eA. σM = 0.15; σ(eA) = 0.10. The standard deviation of the return for stock A is
The index model for stock A has been estimated with the following result: RA = 0.01 + 0.9RM + eA. If σM = 0.25 and R2A = 0.25, the standard deviation of return of stock A is:
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