Expected Return on an Individual Security by Homework Help Classof1

Expected Return on an Individual Security

byHomework Help Classof1

Kobo ebook | March 11, 2013

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"You are given the following two equations:You also have the following information: E(RM) = .15,  M = .15, Rf = .06. answer the following questions assuming that the capital asset pricing model is correct:
(a) Which equation you would use to drtermine the expected return on an individual security with a standard deviation of returns equal to .5 and a   = 2? Given the parameters above, what is the expected return for that security?
(b) Which equation you would use to drtermine the expected return on a portdolio knowing that it is an efficient portfolio (consisting of the market portfolio M combined with the risk-free rate)? If you were told that the standard deviation of returns on that portfolio is equal to  M and you were given the above parameters, what is the expected return portfolio?
(c) Can you determine   of the portfolio in (4b)?
Given your answers above, explain for what type of risky assets equation (1) can be used for, and for what type of risky assets equation (2) can be used for.
"

Title:Expected Return on an Individual SecurityFormat:Kobo ebookPublished:March 11, 2013Publisher:Classof1Language:English

The following ISBNs are associated with this title:

ISBN:9990005830232

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