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MBA,MCS,M.phil
Devry University
Jan-2008 - Jan-2011
MBA,MCS,M.Phil
Devry University
Feb-2000 - Jan-2004
Regional Manager
Abercrombie & Fitch.
Mar-2005 - Nov-2010
Regional Manager
Abercrombie & Fitch.
Jan-2005 - Jan-2008
The following three stocks are available in the market.
| Â |
Expected Return (%) |
Beta |
|
Stock A |
10.5% |
1.20 |
|
Stock B |
13.0 |
0.98 |
|
Stock C |
15.7 |
1.37 |
|
Market |
14.2 |
1.00 |
Assume the market model is valid.
a. Write the market-model equation for each stock.
b. What is the return on a portfolio that is 30-percent stock A, 45-percent stock B, and 25- percent stock C?
c. Suppose the return on the market is 15 percent and there are no unsystematic surprises in the returns.
i. What is the return on each stock?
ii. What is the return on the portfolio?
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