Questions
COEC_V 371 001 002 2025W1 2025W1 COEC 371 Final Exam Dec 16 - Requires Respondus LockDown Browser
Numerical
Assume CAPM holds and that there are only two risky assets, A and B, and one risk-free asset in the market. There are 10 shares of the risky asset A, trading for $7.50. There are 20 shares of the risky asset B, trading for $6.25. You know that the beta of the risky asset A is four times the beta of the risky asset B, that is, 𝛽 𝐴 = 4 𝛽 𝐵 What is the beta of the risky asset B? Enter your final answer as a number rounded to two decimal places. For example, enter 1.23 if your answer is 1.234, and -1.23 if your answer is -1.234.
View Explanation
Verified Answer
Please login to view
Step-by-Step Analysis
We start by identifying the given data and what CAPM implies. In a CAPM framework with two risky assets A and B and a single risk-free asset, the market portfolio comprises all risky assets weighted by their market values.
First, cal......Login to view full explanationLog in for full answers
We've collected over 50,000 authentic exam questions and detailed explanations from around the globe. Log in now and get instant access to the answers!
Similar Questions
位置7的问题 Consider the following information: [table] State of Economy | Probability of State of Economy | Rate of Return if State Occurs Stock A | Stock B Recession | .04 | .097 | .102 Normal | .72 | .114 | .133 Boom | .24 | .156 | .148 [/table] The market risk premium is 7.4 percent, and the risk-free rate is 3.1 percent. The beta of Stock A is _____ and the beta of Stock B is _____.1.47; 1.411.25; 1.411.21; 1.761.47; 1.761.25; 1.89清除选择
Question at position 8 (4 marks, difficulty level: Easy) Suppose the market portfolio excess return tends to increase by 42% when the economy is strong and decline by 28% when the economy is weak. What is the beta of a type S firm whose excess return is 30% on average when the economy is strong and -19% when the economy is weak? 0.700.640.580.55
Question at position 8 (4 marks, difficulty level: Easy) Suppose the market portfolio excess return tends to increase by 42% when the economy is strong and decline by 28% when the economy is weak. What is the beta of a type S firm whose excess return is 30% on average when the economy is strong and -19% when the economy is weak? 0.580.700.550.64
See the attached spreadsheet for a table of various monthly returns Download attached spreadsheet for a table of various monthly returns over the past five years. Using this information, what is beta for Stock A?
More Practical Tools for Students Powered by AI Study Helper
Making Your Study Simpler
Join us and instantly unlock extensive past papers & exclusive solutions to get a head start on your studies!