Consider the following stocks. Stock Expected return Std. Deviation Beta A 15.9% 27.8% 0.93 B 17.8% 23.0% -1.15 C 35.1% 47.6% 0.79 D 24.2% 39.3% 1.26   If the risk-free rate is 2%, which stock has the lowest Sharpe ratio?

Q: Calculate the expected returns and expected standard deviations of a two-stock portfolio in which…

A: Expected return on R1 = 0.10 Expected return on R2 = 0.15 Standard deviation of 1 = 0.03 Standard…

Q: Consider the rate of return of stocks ABC and XYZ.   Year rABC rXYZ 1 20 % 28 % 2 8   11   3 16…

A: Given:

Q: Stock R has a beta of 1.9, Stock S has a beta of 0.35, the expected rate of return on an average…

A: Expected Rate of return on average stock = Risk free Rate + beta * Market risk premium 9% = 7% + 1 *…

Q: porlfolio p consists of two stocks: 50% is invested in stock A and 50% is invested in stock B. stock…

A: Formula for portfolio standard deviation is: Sigma = (w1^2*sigma1^2 + w2^2*sigma2^2 +…

Q: The standard deviation of stock A's returns (σA) is 34%, and the standard deviation of the market…

A: Standard deviation of stock A's returns (σA) is 34% Standard deviation of the market portfolio (σM)…

Q: Consider the two (excess return) index-model regression results for stocks A and B. The risk-free…

A: Generally, investor invest in different stocks to reduce the risk. Each stock has its own measures.…

Q: Stock A and Stock B each have an expected return of 12 percent, a beta of 1.2, and a standard…

A: The expected return of Stock A = 12% The expected return of Stock B = 12% The beta of A and B = 1.2…

Q: Stocks A and B have a correlation coefficient of –0.8. The stocks' expected returns and standard…

A: Standard deviation is a variation in the mean value of given data. Standard deviation is a…

Q: Stock A has an expected return of 10% and a standard deviation of 20%. Stock B has an expected…

A: Expected return of B = 13% Risk free rate = 5% Market risk premium = 6%

Q: which stocks should be chosen? (round final answer 2 decimal places) Coefficient of variance of…

A: Coefficient of variance = Standard Deviation / Expected Return It shows the standard deviation per…

Q: 3. The data below describe a three-stock financial market that satisfies the single-index model:…

A: We will apply the required formula to calculate the required output. Return can be calculated by…

Q: The following three stocks are available in the market:      E(R) β   Stock A 10.9 % 1.18…

A: Given the following information Expected return of Stock A: 10.9%Beta of Stock A: 1.18 Expected…

Q: The following are estimates for two stocks.   Stock Expected Return Beta Firm-Specific Standard…

A: Here, Standard Deviation of Market is 22% Risk-free rate is 11% Expected Return, Beta and…

Q: Consider the two (excess return) index-model regression results for stocks A and The risk-free…

A: William F. Sharpe, a Nobel Laureate, devised the Sharpe ratio, which is used to help investors…

Q: Stock X has a 10% expected return, a beta coefficient of0.9, and a 35% standard deviation of…

A: “Hey, since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Expected return for the market, 12%; Standard deviation of market return, 21%; Risk-free rate, 8%;…

A: Formula to calculate Beta of stock is Beta = Correlation coefficient between Stock  and the market*…

Q: Stock A has a standard deviation of 20% and a beta of 0.6. Stock B has a standard deviation of 12%…

A: The portfolio beta is calculated as weight of stock multiplied by the respective beta

Q: The following three stocks are available in the market:   E(R) Beta Stock A 11.3% 1.22 Stock B…

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Q: Stock A has a beta of 0.87 and an expected return of 9.21 percent. Stock B has a beta of 1.36 and an…

A: Expected return as per CAPM = Risk free rate + Beta * Market risk premium

Q: You have the following data on three stocks: Stock Standard Deviation Beta A. 0.15 0.79 0.25 0.61 C…

A:

Q: The standard deviation of stock returns for Stock A is 40%. The standard deviation of the market…

A: A beta coefficient shows the systematic risk or the risk related to the market. The beta coefficient…

Q: The index model has been estimated using historical excess return data for stocks A, B, and C, with…

A: "Hi there, thanks for posting the questions. But as per our Q&A guidelines, we must answer the…

Q: A stock has an expected return of 14 percent, a beta of 1.65, and the expected return on the market…

A: Given that the expected return on a stock is 14%, expected return on the market is 11.2% and the…

Q: Stock Y has a beta of 1.2 and an expected return of 11.5 percent. Stock Z has a beta of .80 and an…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Stock A has a beta of 1.2 and a standard deviation of 20%. Stock B has a beta of 0.8 and a standard…

A: Given: Particulars Beta Amount Stock A 1.2  $ 100,000 Stock B 0.8  $ 100,000      $ 200,000

Q: A stock has an expected return of 13 percent, its beta is 1.35, and the expected return on the…

A: A risk-free rate of return is the return that an investor earns by investing in securities that have…

Q: Use the following table of information: Stock X Stock Y Expected Return 14% 18% Standard Deviation…

A: The term "variance" is referred to as the degree of volatility that a stock have with respect to its…

Q: Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 31…

A: Weight of stock in minimum variance portfolio is calculated by this formula. sigma stands for…

Q: A certain stock has a beta of 1.2. If the risk-free rate of return is 4.5 percent and the market…

A: Risk-free return = 4.5% Market risk premium = 8% a) Beta = 1.2 b) Beta = 1.08 CAPM formula: Expected…

Q: Stock M N O P Standard deviation 12% 20% 15% 30% 1. Which stock is the riskest?…

A: The relationship between the return and risk is direct. When risk of stock is more, return provided…

Q: tfolio P has a beta of 1.0.

A: The beta of the portfolio refers to the weighted sum of the assets of the company according to the…

Q: 8. Stocks A and B have the following returns (see Pearson MyLab Finance for the data in Excel…

A: The Expected return of the stock is calculated by dividing the total return of a stock over a period…

Q: Stock A has an expected return of 12% and a standard deviation of 35%. Stock B has an expected…

A: Expected return on portfolio is the weighted average return on stocks in the portfolio and can be…

Q: Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .092, E(RB) =…

A: Portfolio is a bundle of various investments. To manage the risk, investors invest the money in…

Q: Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .092, E(RB) =…

A: The expected rate of return of the portfolio is the weighted average rate of return of all the…

Q: Company A’s stock has an expected return of 0.10 and a standard deviation of 0.25. Company B’s stock…

A: Computation of expected return as follows: Expected Return of the portfolio = (Weight of stock A…

Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following…

A: Given information: Beta of stock A is 1.30 Beta of stock B is 1.60

Q: Stocks A and B have the following probability distributions of expected future returns:…

A: Probability Return Expected return A B C=A*B 0.1 -20% -2.00% 0.2 7% 1.40% 0.4 15% 6.00%…

Q: Stocks A, B, and C have expected returns of 24 percent, 24 percent, and 20 percent, respectively,…

A: The presentation of the ratio of the standard deviation of the project and the average return of a…

Q: A stock has a beta of 1.2, the expected return on the market is 9 percent, and the risk-free rate is…

A: Given, Beta =1.2 Expected Market Return = 9% Risk Free rate = 1.5%   Formula to be used : CAPM…

Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following…

A: We know that, Beta of Stock = correlation*Standard Deviation of Stock/Standard Deviation of Market…