Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
The historical returns for the past three years for Stock B and the stock market portfolio are Stock B: 24 percent, 0 percent, 24 percent; market portfolio: 10 percent, 12 percent, 20 percent. Calculate the beta for Stock B.
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1
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1.17
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1.13
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0.86
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- A stock had returns of 8%, 14%, and 2% for the past three years. Based on these returns, what is the probability that this stock will earn at least 20% in any one given year? A) 0.5% B) 1.0% C)3% D) 5.0% E) 16.0%arrow_forwardTwo common stocks, Consolidated Edison and Apple, have the following expected return and standard deviation of return over the next year: Common stock Expected rate of return Standard deviation Consolidated Edison 12% 6% Apple 20% 15% Additionally, assume that the correlation coefficient of returns on the two securities is +0.50. For a portfolio consisting of 75 percent of the funds invested in Consolidated Edison and the remainder in Apple, determine the following: 41-45) Expected rate of return on the portfolio 46-50) Standard deviation of the rate of returnarrow_forwardYou observed that the most recent price of a stock was $50. If the stock's dividends are expected to grow at a constant rate of 6% per year, what is the estimated stock price in year 1 (i.e., P₁)? O $47.17 O $53.00 O $42.65 O $58.25arrow_forward
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