Problem 7-21, Stock Betas
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Determine the beta of each of the stocks given a table of stock returns and the market returns.
Determine the beta of each of the stocks given a table of stock returns and the market returns.
Given the standard deviation of the market… find the beta using the standard deviation or find the standard deviation given the beta for a well-diversified portfolio. For the last part, they ask you about the beta of a poorly diversified portfolio given its standard deviation.
Given the beta and standard deviation of return for two different companies along with the standard deviation of the market… determine the standard deviation of the portfolio given different weights of investment on each stock.