The following are estimates for two stocks. Firm-Specific Standard Deviation Stock A B Expected Return 13% 18 Beta 0.8 1.2 30% 40 The market index has a standard deviation of 22% and the risk-free rate is 8%. a. What are the standard deviations of stocks A and B? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
The following are estimates for two stocks. Firm-Specific Standard Deviation Stock A B Expected Return 13% 18 Beta 0.8 1.2 30% 40 The market index has a standard deviation of 22% and the risk-free rate is 8%. a. What are the standard deviations of stocks A and B? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:The following are estimates for two stocks.
Stock
A
B
Expected
Return
Stock A
Stock B
13%
18
Beta
0.8
1.2
Firm-Specific
Standard
Deviation
The market index has a standard deviation of 22% and the risk-free rate is 8%.
a. What are the standard deviations of stocks A and B? (Do not round intermediate calculations. Round your answers to 2 decimal
places.)
30%
40
%
%
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