need answer fast hand written ,<<<<< Suppose that the index model for stocks A and B is estimated from excess returns with the following results:RA1.00% + 0.45RM + eARB= -1.00% + 1.00RM + eBOM16%; R-squarea= 0.28; R-squareB = 0.21Assume you create portfolio P with investment proportions of 0.60 in A and 0.40 in B.a. What is the standard deviation of the portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimalplaces.)Standard deviation%b. What is the beta of your portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)Portfolio beta..... c. What is the firm-specific variance of your portfolio? (Do not round your intermediate calculations. Round your answer to 4 decimalplaces.)Firm-specificd. What is the covariance between the portfolio and the market index? (Do not round your intermediate calculations. Round youranswer to 3 decimal places.)Covariance0.020

The beta of A is 0.45 Beta of B is 1 The SD of A is 0.28 SD of B is 0.21 SD of market is 16%. Weight…

Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 1.00% + 0.45RM + eA RB = -1.00% + 1.00RM + eB OM = 16%; R-squareą = 0.28; R-squareg = 0.21 Assume you create portfolio P with investment proportions of 0.60 in A and 0.40 in B. a. What is the standard deviation of the portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places.) Standard deviation

Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 1.00% + 0.45RM + eA RB = -1.00% + 1.00RM + eB OM = 16%; R-squareą = 0.28; R-squareg = 0.21 Assume you create portfolio P with investment proportions of 0.60 in A and 0.40 in B. a. What is the standard deviation of the portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places.) Standard deviation

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

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Question

need answer fast hand written

<
<
<
<
<

Suppose that the index model for stocks A and B is estimated from excess returns with the following results:
RA
1.00% + 0.45RM + eA
RB
= -1.00% + 1.00RM + eB
OM
16%; R-squarea
= 0.28; R-squareB = 0.21
Assume you create portfolio P with investment proportions of 0.60 in A and 0.40 in B.
a. What is the standard deviation of the portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal
places.)
Standard deviation
%
b. What is the beta of your portfolio? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)
Portfolio beta
.....

c. What is the firm-specific variance of your portfolio? (Do not round your intermediate calculations. Round your answer to 4 decimal
places.)
Firm-specific
d. What is the covariance between the portfolio and the market index? (Do not round your intermediate calculations. Round your
answer to 3 decimal places.)
Covariance
0.020

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