Answer is complete but not entirely correct. Variance Security A 1,521 Security B Security C 1,609 2,440 b. Now assume that there are an infinite number of assets with return characteristics identical to those of A, B, and C, respectively. What will be the mean and variance of excess returns for securities A, B, and C? (Enter the variance answers as a percent squared and mean as a percentage. Do not round intermediate calculations. Round your answers to the nearest whole number.) Answer is complete but not entirely correct. Mean Variance Security A 15% 1,521 Security B 17% 1,609 Security C 19% 2,440 Assume that security returns are generated by the single-index model, Ri a BiRM + ei where R₁ is the excess return for security /and Ry is the market's excess return. The risk-free rate is 3%. Suppose also that there are three securities A, B, and C, characterized by the following data: Security Bi E(Ri} #{@į) A 1.5 61 298 B 1.7 8 15 C 1.9 10 24 a. If oy 26%, calculate the variance of returns of securities A, B, and C. Answer is complete but not entirely correct. Variance Security A 1,521 Security B 1,609 Security C 2,440 b. Now assume that there are an infinite number of assets with return characteristics identical to those of A, B, and C, respectively. What will be the mean and variance of excess returns for securities A, B, and C? (Enter the variance answers as a percent squared and mean as a percentage. Do not round intermediate calculations. Round your answers to the nearest whole number.) < Prev 3 of 20 Next >
Answer is complete but not entirely correct. Variance Security A 1,521 Security B Security C 1,609 2,440 b. Now assume that there are an infinite number of assets with return characteristics identical to those of A, B, and C, respectively. What will be the mean and variance of excess returns for securities A, B, and C? (Enter the variance answers as a percent squared and mean as a percentage. Do not round intermediate calculations. Round your answers to the nearest whole number.) Answer is complete but not entirely correct. Mean Variance Security A 15% 1,521 Security B 17% 1,609 Security C 19% 2,440 Assume that security returns are generated by the single-index model, Ri a BiRM + ei where R₁ is the excess return for security /and Ry is the market's excess return. The risk-free rate is 3%. Suppose also that there are three securities A, B, and C, characterized by the following data: Security Bi E(Ri} #{@į) A 1.5 61 298 B 1.7 8 15 C 1.9 10 24 a. If oy 26%, calculate the variance of returns of securities A, B, and C. Answer is complete but not entirely correct. Variance Security A 1,521 Security B 1,609 Security C 2,440 b. Now assume that there are an infinite number of assets with return characteristics identical to those of A, B, and C, respectively. What will be the mean and variance of excess returns for securities A, B, and C? (Enter the variance answers as a percent squared and mean as a percentage. Do not round intermediate calculations. Round your answers to the nearest whole number.) < Prev 3 of 20 Next >
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Answer is complete but not entirely correct.
Variance
Security A
1,521
Security B
Security C
1,609
2,440
b. Now assume that there are an infinite number of assets with return characteristics identical to those of A, B, and C, respectively.
What will be the mean and variance of excess returns for securities A, B, and C? (Enter the variance answers as a percent squared
and mean as a percentage. Do not round intermediate calculations. Round your answers to the nearest whole number.)
Answer is complete but not entirely correct.
Mean
Variance
Security A
15%
1,521
Security B
17%
1,609
Security C
19%
2,440
Transcribed Image Text:Assume that security returns are generated by the single-index model,
Ri a BiRM + ei
where R₁ is the excess return for security /and Ry is the market's excess return. The risk-free rate is 3%. Suppose also that there are
three securities A, B, and C, characterized by the following data:
Security Bi E(Ri} #{@į)
A
1.5
61 298
B
1.7
8
15
C
1.9
10
24
a. If oy 26%, calculate the variance of returns of securities A, B, and C.
Answer is complete but not entirely correct.
Variance
Security A
1,521
Security B
1,609
Security C
2,440
b. Now assume that there are an infinite number of assets with return characteristics identical to those of A, B, and C, respectively.
What will be the mean and variance of excess returns for securities A, B, and C? (Enter the variance answers as a percent squared
and mean as a percentage. Do not round intermediate calculations. Round your answers to the nearest whole number.)
< Prev 3 of 20
Next >
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