19.07.2022 - 12:58

Consider the following information: Portfolio Expected Return Standard Deviation Risk-free 5% 0 Market 13.2 1.0 A 8.0 0.6 a. Calculate the expected return of portfolio A with a beta of 0.6. (Round yo

Question:

Consider the following information:

Portfolio Expected Return Standard Deviation
Risk-free 5% 0
Market 13.2 1.0
A 8.0 0.6

a. Calculate the expected return of portfolio A with a beta of 0.6. (Round your answer to 2 decimal places.)

Expected return: __________ %

b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

Alpha: __________ %

Answers (0)
  • Helena
    April 14, 2023 в 04:37
    i. A direct quotation is a quote where the domestic currency is the base currency and the foreign currency is the counter currency. The direct quote for euros is $1.25 per euro. ii. An indirect quotation is a quote where the domestic currency is the counter currency and the foreign currency is the base currency. The indirect quote for kronor is 6.7444 kronor per U.S. dollar. iii. To calculate the indirect quote for a euro, you would divide 1 by the direct quote for euros (1.25) to get 0.80 dollars per euro. To calculate the direct quote for a krona, you would divide 1 by the indirect quote for kronor (0.1481) to get 6.7444 kronor per U.S. dollar. iv. A cross rate is the exchange rate between two currencies where neither currency is the domestic currency. The two cross rates between euros and kronor are: 1 euro = 10.5472 kronor and 1 krona = 0.0948 euros.
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