Assume That the Market Is in Equilibrium and That Portfolio

question 62

Multiple Choice

Assume that the market is in equilibrium and that Portfolio AB has 50% invested in Stock A and 50% invested in Stock B.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,r_M - r_RF,is 6%.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) Since the two stocks have zero correlation, Portfolio AB is riskless.
• B) Stock B's beta is 1.0000.
• C) Portfolio AB's required return is 11%.
• D) Portfolio AB's standard deviation is 25%.
• E) Stock A's beta is 0.8333.

Grasp the professional and educational achievements and challenges of South Asian Americans in the U.S.

Acknowledge the influence of cultural values on reluctance to discuss individual problems and seek help.

Understand the impact of communalist orientation on mental health and the preferred types of therapies among South Asian Americans.

Understand the concept of proper presentment and notice requirements in negotiable instruments.

---

Definitions:

Conflict Theory

A sociological perspective that focuses on the inherent conflicts of interest between different social groups, often revolving around issues of power, resources, and inequality.

Functionalism

A sociological perspective that explains social structures and institutions as components that work together to maintain societal stability and functionality.

Social Control

Mechanisms, strategies, and institutions society employs to persuade individuals to conform to norms and laws.

Television Dramas

Genres of television programs that focus on narrative storytelling with emotional or thematic depth, often involving complex characters and conflicts.