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Business, 05.11.2019 05:31 leslcookie23

Stock a has an expected return of 10% and a standard deviation of 20%. stock b has an expected return of 13% and a standard deviation of 30%. the risk-free rate is 5% and the market risk premium, rm- rrf, is 6%. assume that the market is in equilibrium. portfolio ab has 50% invested in stock a and 50% invested in stock b. the returns of stock a and stock b are independent of one another, i. e., the correlation coefficient between them is zero. which of the following statements is correct? a. portfolio ab's required return is 11%. b. portfolio ab's standard deviation is 25%. c. stock a's beta is 0.8333. d. stock b's beta is 1.. e. since the two stocks have zero correlation, portfolio ab is riskless.

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