EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 7, Problem 7P
Summary Introduction
To determine: The current value per share.
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Don't used hand raiting and don't used Ai solution
(2x76m A = + S)
Waterfront Inc. wishes to borrow on a short-term basis without
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Expected
Standard
Stock
Return
Beta Deviation
A
B
12%
16
0.75
1.25
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37
The market index has a standard deviation of 22% and the risk-free rate is 9%.
Required:
a. What are the standard deviations of stocks A and B?
b. Suppose that we were to construct a portfolio with proportions:
Stock A
Stock B
T-bills
0.25
0.50
0.25
Compute the expected return, beta, nonsystematic standard deviation, and standard
deviation of the portfolio.
Complete this question by entering your answers in the tabs below.
Required A Required B
What are the standard deviations of stocks A and B?
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
Stock A
0.33 %
Stock B
0.46
%
Chapter 7 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
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