Compute the market betas for assets x and y - compute the


Consider the following assets:

1247_Table 4.jpg

(a) Compute the market betas for assets X and Y.

(b) Compute the correlations of assets X and Y with M.

(c) Assume you were holding only M. You now are selling off 10% of your M portfolio to replace it with 10% of either X or Y. Would an MX portfolio or an MY portfolio be riskier?

(d) Is the correlation indicative of which of these two portfolios ended up riskier? Is the market beta indicative?

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Financial Management: Compute the market betas for assets x and y - compute the
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