The standard deviation of return of the stock is 36 and


1. Consider a bond which pays 7% coupon rate semiannually and has 7 years to maturity. The market requires an interest rate of 8% on bonds of this risk. What is this bond's price?

2. The correlation coefficient between a stock and the market portfolio is +0.75. The standard deviation of return of the stock is 36% and that of the market portfolio is 25%. Calculate the beta of the stock.

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Financial Management: The standard deviation of return of the stock is 36 and
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