Posted by **Anonymous** on Sunday, August 15, 2010 at 5:05pm.

Consider the following data for a one-factor economy. All portfolios are well

diversi ed.

Table 1: One-factor Economy

Portfolio E(r) Beta

A 10% 1.0

F 4 0

Suppose another portfolio E is well diversi ed with a beta of 2/3 and expected return of

9%. Would an arbitrage opportunity exist? If so, what would the arbitrage strategy be?

## Answer This Question

## Related Questions

- Finance - Please Help. Suppose that a portfolio consists of 3 securities (1,2,3...
- Finance - Please Help. Suppose that a portfolio consists of 3 securities (1,2,3...
- CAPM - choose two other companies,look up their beta and report the names of ...
- Finance - Consider the following two securities X and Y X y Return- 20.0% Return...
- Finance - You hold a diversified portfolio consisting of a $10,000 investment in...
- Finance - Currently you own a portfolio comprised of the following three ...
- Finance - Currently you own a portfolio comprised of the following three ...
- investing - You have a $ 2 million portfolio consisting of $100,000 investment ...
- Financial Management - You have a $2 million portfolio consisting of a $100,000 ...
- calculating BETA - I am having the most trouble with this. Any help or direction...

More Related Questions