Investments
Investments
11th Edition
ISBN: 9781259277177
Author: Zvi Bodie Professor, Alex Kane, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 5, Problem 14PS

a.

Summary Introduction

Introduction: Treasury bill is a government issued instrument, which is issued to attain short term obligations of the government. As T-bills are issued by government organizations it contains no risk and act as a secured investment.

To identify: the T-bill rate.

b.

Summary Introduction

Introduction: A set of securities held by an investor is known as portfolio. A portfolio contains various securities which help in reducing the overall risk of the investment.

To calculate: the expected return on big/value portfolio.

c.

Summary Introduction

Introduction: The difference between market return on security and risk free rate of return like return from T-bills is known as risk premium.

To calculate: the risk predictions on the stock market.

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