Finance 8 - 17. Stock X has a beta of 0.7 and Stock Y has a...

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17.  Stock X has a beta of 0.7 and Stock Y has a beta of 1.3. The standard deviation of each stock's returns is 20%. The stocks' returns are independent of each other, i.e., the correlation coefficient, r, between them is zero. Portfolio P consists of 50% Stock X and 50% Stock Y. Given this information, which of the following statements is CORRECT? A)  Portfolio P has a beta of 1.0 and a required return that is equal to the riskless rate, r RF . B)  The required return on Portfolio P is the same as the required return on the market (r M ). C)  Portfolio P has a beta of 0.7. D)  Portfolio P has a standard deviation of 20%. E)  The required return on Portfolio P is equal to the market risk premium (r M - r RF ). Points Earned:  0.0/5.0  Correct Answer(s): B 18.  Stock A has a beta of 0.8 and Stock B has a beta of 1.2. 50% of Portfolio P is invested in Stock A and 50% is invested in Stock B. If the market risk premium (r M - r RF ) were to increase but the risk-free rate (r RF ) remained constant, which of the following would occur? A) 
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Finance 8 - 17. Stock X has a beta of 0.7 and Stock Y has a...

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