Multiple Choice
Stocks A and B are quite similar: Each has an expected return of 12%, a beta of 1.2, and a standard deviation of 25%. The returns on the two stocks have a correlation of 0.6. Portfolio P has 50% in Stock A and 50% in Stock B. Which of the following statements is CORRECTσ
A) portfolio p has a standard deviation that is greater than 25%.
B) portfolio p has an expected return that is less than 12%.
C) portfolio p has a standard deviation that is less than 25%.
D) portfolio p has a beta that is less than 1.2.
E) portfolio p has a beta that is greater than 1.2.
Correct Answer:
Verified
Correct Answer:
Verified
Q7: Barker Corp.has a beta of 1.10, the
Q9: If a stock's market price exceeds its
Q24: The slope of the SML is determined
Q57: If an investor buys enough stocks, he
Q91: Variance is a measure of the variability
Q96: Stock LB has a beta of 0.5
Q99: Recession, inflation, and high interest rates are
Q103: Stock X has a beta of 0.6,
Q104: We would generally find that the beta
Q139: "Risk aversion" implies that investors require higher