You have been provided the following data about the securities of three firms, the market portfolio, and the risk-free asset: a. Fill in the missing values in the table. (Leave no cells blank - be certain to enter 0 wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) * With the market portfolio b-1. What is the expected return of Firm A? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-2. What is your investment recommendation regarding Firm A for someone with a well-diversified portfolio? multiple choice 1 Buy Sell b-3. What is the expected return of Firm B? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-4. What is your investment recommendation regarding Firm B for someone with a well-diversified portfolio? multiple choice 2 Sell Buy b-5. What is the expected return of Firm C? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-6. What is your investment recommendation regarding Firm C for someone with a well-diversified portfolio? multiple choice 3 Sell Buy

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
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You have been provided the following data about the securities of three firms, the market portfolio, and the risk-free asset: a. Fill in the missing values in the table. (Leave no cells blank - be certain to enter 0 wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) * With the market portfolio b-1. What is the expected return of Firm A? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-2. What is your investment recommendation regarding Firm A for someone with a well-diversified portfolio? multiple choice 1 Buy Sell b-3. What is the expected return of Firm B? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-4. What is your investment recommendation regarding Firm B for someone with a well-diversified portfolio? multiple choice 2 Sell Buy b-5. What is the expected return of Firm C? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-6. What is your investment recommendation regarding Firm C for someone with a well-diversified portfolio? multiple choice 3 Sell Buy

a. Fill in the missing values in the table. (Leave no cells blank - be certain to enter 0
wherever required. Do not round intermediate calculations and round your
answers to 2 decimal places, e.g., 32.16.)
Security
Firm A
Firm B
Firm C
The market portfolio
The risk-free asset
Expected Return Standard Deviation Correlation*
0.100
0.41
0.150
0.170
0.12
0.05
0.66
0.21
0.60
0.45
Beta
0.86
1.41
Transcribed Image Text:a. Fill in the missing values in the table. (Leave no cells blank - be certain to enter 0 wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Security Firm A Firm B Firm C The market portfolio The risk-free asset Expected Return Standard Deviation Correlation* 0.100 0.41 0.150 0.170 0.12 0.05 0.66 0.21 0.60 0.45 Beta 0.86 1.41
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