The co-variance between stock and market index. Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

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Chapter 8, Problem 12PS

Summary Introduction

To calculate: The co-variance between stock and market index.

Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

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Anderson is a portfolio manager at a reputable investment firm, Beta Investments, His job involves managing a diverse investment portfolio including institutional clients and high-networth individuals. Anderson is well respected and has a track record of strong performance. recently Anderson received a report that one of his funds has underperformed in its benchmark index significantly over the past 3 years. the report however was produced by an internal analyst who used a different benchmark for comparison that favored the fund's performance. the actual benchmark that should have been used would have shown that the funds performed slightly better than expected but not significantly. As the fund's performance report is set to be presented at an upcoming meeting. Anderson is faced with a crucial decision. 1. Use misleading performance reports when presenting them to clients, highlighting the fund's superior returns relative to the favorable benchmark. this could potentially lead to new…

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Calculate the expected return of an asset with a beta of 0.8, a risk free rate of 3%, and an expected market return of 10%, using the CAPM formula You bought a security with an expected rate of 0.13 and a beta of 1.3. the risk free rate of 0.04 with a market expected rate of 0.115, Using the CAPM model find the value of the stock. The risk free rate is 7%, the expected market rate i=of return is 15%. Stock XYZ has a beta of 1.3 with a rate of return of 12%, what is the value of the stock using the CAPM model formula. The risk free rate and the expected market rate of return are 0.056 and 0.125 using the CAPM model, the expected rate of return of the security with a beta of 1.25 is equal to? Determine the expected rate of return for the…

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Question

Chapter 8, Problem 12PS

Summary Introduction

To calculate: The co-variance between stock and market index.

Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 8, Problem 12PS

Summary Introduction

To calculate: The co-variance between stock and market index.

Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 8, Problem 12PS

Summary Introduction

To calculate: The co-variance between stock and market index.

Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 8, Problem 12PS

Summary Introduction

To calculate: The co-variance between stock and market index.

Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

Answer 6

Chapter 8, Problem 12PS

Summary Introduction

To calculate: The co-variance between stock and market index.

Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

Answer 7

Chapter 8, Problem 12PS

Summary Introduction

To calculate: The co-variance between stock and market index.

Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

Answer 8

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Ch. 8 - Prob. 1PS Ch. 8 - Prob. 2PS Ch. 8 - Prob. 3PS Ch. 8 - Prob. 4PS Ch. 8 - Prob. 5PS Ch. 8 - Prob. 6PS Ch. 8 - Prob. 7PS Ch. 8 - Prob. 8PS Ch. 8 - Prob. 9PS Ch. 8 - Prob. 10PS

The co-variance between stock and market index. Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

Solution Summary: The author explains the value of co-variance between stock A and market index.

Videos

To calculate: The co-variance between stock and market index.

Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

Want to see the full answer?

Chapter 8 Solutions

The co-variance between stock and market index. Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

Solution Summary: The author explains the value of co-variance between stock A and market index.

Videos

To calculate: The co-variance between stock and market index. Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.

Want to see the full answer?

Chapter 8 Solutions

To calculate: The co-variance between stock and market index.

Introduction: The value of co-variance measures the movement direction of the stocks. If the value is positive means both stocks are moving in same direction. If value is negative means both are moving in opposite direction.