Multiple Choice
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 deviation of 25%.Portfolio P has $200,000 consisting of $100,000 invested in Stock A and $100,000 in Stock B.Which of the following statements is CORRECT? (Assume that the stocks are in equilibrium. )
A) Stock A's returns are less highly correlated with the returns on most other stocks than are B's returns.
B) Stock B has a higher required rate of return than Stock A.
C) Portfolio P has a standard deviation of 22.5%.
D) More information is needed to determine the portfolio's beta.
E) Portfolio P has a beta of 1.0.
Correct Answer:
Verified
Correct Answer:
Verified
Q61: When adding a randomly chosen new stock
Q64: We would almost always find that the
Q110: The realized return on a stock portfolio
Q124: Other things held constant,if the expected inflation
Q125: Assume that the risk-free rate remains constant,but
Q126: Stock A has a beta of 0.8,Stock
Q127: Most corporations earn returns for their stockholders
Q128: Which of the following statements is CORRECT?<br>A)
Q131: Assume that the risk-free rate,r<sub>RF</sub>,increases but the
Q133: Assume that you hold a well-diversified portfolio