Finance

Security A has an expected return of 7%, a standard deviation of returns of 35%, a correlation coefficient with the market of -0.3, and a beta coefficient of -1.5. Security B has and expected return of 12%, a standard deviation of returns of 10%, a correlation with the market of 0.7, and a beta coefficient of 1.0. Which security is risker? Why?

  1. 👍 0
  2. 👎 0
  3. 👁 81
asked by Jamal

Respond to this Question

First Name

Your Response

Similar Questions

  1. math

    You are thinking of adding one of two investments to an already well diversified portfolio. Security A with expected return of 12%, standard deviation of 20.9%, and beta of 0.8. Security B with expected return of 12%, standard

    asked by mamey on May 5, 2014
  2. finance

    The expected return on the market is 12% and the risk free rate is 7%. The standard deviation of the return on the market is 15%. Ones investor creates a portfolio on the efficient frontier with an expected return of 10%. Another

    asked by benish on May 17, 2012
  3. Statistics/probability

    You are considering two mutual funds for your investment. The possible returns for the funds are dependent on the state of the economy and are given in the accompanying table. State of the Economy Fund A Fund B Good 20% 40% Fair

    asked by Eric on September 13, 2015
  4. Math

    You are considering two mutual funds for your investment. The possible returns for the funds are dependent on the state of the economy and are given in the accompanying table. State of the Economy | Fund A | Fund B Good | 20% |

    asked by Will on May 24, 2015
  5. Finance

    Calculate the return and standard deviation for the following stock, in an economy with five possible states. If a Boom (Probability=25%) economy occurs, then the expected return is 30%. If a Good (Probability=25%) economy occurs,

    asked by Margaret on June 4, 2013
  6. Math

    Question An investor puts $15,000 into each of four stocks, labeled A, B, C, and D. The table shown below contains the means and standard deviations of the annual returns of these four stocks. Stock Mean Annual Return Standard

    asked by Kessy on October 15, 2013
  7. statistics

    An investment broker reports that the yearly returns on common stocks are approximately normally distributed with a mean return of 12.4 percent and a standard deviation of 20.6 percent. On the other hand, the firm reports that the

    asked by Anonymous on February 19, 2012
  8. math

    It is equally probable that stock A will have a +10% or -10% rate of return The only other possibility is that it will return 0%.The probability of 0% is twice that for a return of +10%. What is the expected return and Standard

    asked by Anonymous on September 24, 2014
  9. Finance

    You are considering buying 100 shares of TEXAS INC common stock. The common stock is expected to pay a dividend of $2.50 a year from today; the growth rate of the dividends is 8% for two years, then level off to a constant rate of

    asked by Sally on June 14, 2013
  10. STRATEGIC MANAGEMENT

    6. At present, suppose the risk-free rate is 10 percent and the expected return on the market portfolio is 15 percent. The expected returns for four stocks are listed together with their expected betas. Stock Expected Return Beta

    asked by Anonymous on February 2, 2019

More Similar Questions