Acme 13% 0.8 30%
Bundu 18% 1.2 40%
The market index has a standard deviation of 22% and the risk free rate is 8%
(a) What are the standard deviations of stocks of Acme and Bundu
(b) Suppose we were to construct a portfolio with proportions:
Stock Acme: 0.30
Stock Bundu: 0.45
compute the expected return, standard deviation, beta, and nonsystematic standard deviation of the portfolio.
Dear Student, The answer to your question is as follows: Stock Expected Return Beta Firm Specific Standard Deviation... View the full answer
This question was asked on Mar 19, 2010 and answered on Mar 19, 2010.
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