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.)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter2: Fundamental Economic Concepts
Section: Chapter Questions
Problem 6E
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![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
%
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6fab3e5b-e466-47a9-be3a-daa0be1d54d3%2Fb64a4e64-086a-40b1-8533-936e95665e51%2Ff30ii5d_processed.png&w=3840&q=75)
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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