A stock has a market beta of 0.86 and a standard deviation of 0.28. If the market standard deviation is 0.30, what is the covariance between the stock return and the market return?
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A stock has a market beta of 0.86 and a standard deviation of 0.28. If the market standard deviation is 0.30, what is the covariance between the stock return and the market return?
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- What is a characteristic line? How is this line used to estimate a stocks beta coefficient? Write out and explain the formula that relates total risk, market risk, and diversifiable risk.The standard deviation of stock returns for Stock A is 40%. The standard deviation of the market return is 20%. If the correlation between Stock A and the market is 0.70, then what is Stock A’s beta?A stock has a market beta of 0.62 and a standard deviation of 0.27. If the market standard deviation is 0.30, what is thecovariance between the stock return and the market return?
- The covariance of the market's returns with the stock's returns is 0.008. The standard deviation ofthe market's returns is 0.08, and the standard deviation of the stock's returns is 0. 11. What is thecorrelation coefficient of the returns of the stock and the returns of the market?Suppose you have the following expectations about the market condition and the returns on Stocks X and Y. a) What are the expected returns for Stocks X and Y, E(rX) and E(rY)? b) What are the standard deviations of the returns for Stocks X and Y, σX and σY?A stock’s returns have the following distribution:Assume the risk-free rate is 2%. Calculate the stock’s expected return, standard deviation,coefficient of variation, and Sharpe ratio.
- (a) A stock’s returns have the following distribution: Calculate the stock’s expected return, standard deviation, and the coefficient of variation.The index model has been estimated for stock A with the following results: RA = 0.01 + 1.2RM + eA. σM = 0.15; σ(eA) = 0.10. The standard deviation of the return for stock A isThe metric that is used to show the extent to which a given stock’s return move up and down with the stock market? a. Correlation b. Beta c. Standard deviation d. Expected return
- 1) what is the expected return rate for stock A 2) what is the expected return rate for stock B 3) what is the standard deviation of returns for stock A 4) what is the standard deviation of returns for stock B.If the standard deviation of stock 'A' is .25, the standard deviation of stock 'B' is .30, and the correlation between stocks 'A' and 'B' is 0.7, the covariance between stocks 'A' and 'B' is___.When working with the CAPM, which of the following factors can be determined with the most precision? a. The beta coefficient of "the market," which is the same as the beta of an average stock. b. The beta coefficient, bi, of a relatively safe stock. c. The market risk premium (RPM). d. The most appropriate risk-free rate, rRF. e. The expected rate of return on the market, rM.