What is the covariance between ibm and the market what is, Financial Management

+44 141 628 6080
[email protected]

What is the covariance between ibm and the market what is

Assume that the market has an expected return of 12% and volatility (risk or standard deviation) of 20%. Suppose the CAPM accurately describes the data one is using. IBM has a 0.90% correlation with the market and 50% volatility. The risk-free rate is 3%.

a. What is the covariance between IBM and the market?

b. What is IBM’s beta?

c. What is the expected return on IBM?

d. What percentage of IBM’s total variance risk is specific (nonsystematic)?

e. Suppose you want to take only 15% risk on your investment portfolio. What is the best you can do if you invest in only IBM and the risk-free asset?

f. How much better can you do if you add in the market portfolio in part e?

View Complete Question

Request for Solution File

Ask an Expert for Answer!!

Financial Management: What is the covariance between ibm and the market what is

Reference No:- TGS02848027

Expected delivery within 24 Hours

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Recent Questions Asked Financial Management

Q : What is the firms after-tax component cost of debt for

a companys 7 coupon rate semiannual payment 1000 par value bond that matures in 25 years sells at a price of 61008 the

Q : You decide to borrow eur at the relatively low rates and

you are looking at the markets for thb thai bahts and eur you observe that the bidask interest rates in thailand are

Q : The systematic risk principle state that the expected

1 the systematic risk principle state that the expected return on an asset depend solely on thea the risk associated

Q : Assume that filkins cost of capital is 14 calculate the two

filkins fabric company is considering the replacement of its old fully depreciated knitting machine two new models are

Q : What is the covariance between ibm and the market what is

assume that the market has an expected return of 12 and volatility risk or standard deviation of 20 suppose the capm

Q : What is the market portfolio in this hypothetical economy

suppose that there are only two stocks in the stock market stock a sells for 20 and has 100 shares outstanding stock b

Q : Why do larger banks tend to have lower net interest

1 why do larger banks tend to have lower net interest margins2 what are some examples of economies of scale for banks

Q : What is your risk-free arbitrage profit available if a

1 what is your risk-free arbitrage profit available if a six-month option pair has a strike price of 150 a spot price

Q : He expects to receive a net cash flow of 32500 per year

payback and arr each of the following scenarios is independent all cash flows are after-tax cash flowsrequired1 brad

1929809

Questions
Asked

3,689

Active Tutors

1435341

Questions
Answered

Start Excelling in your courses, Ask a tutor for help and get answers for your problems !!

ask Question

Asked Questions

What is the current ratio for kramer industries

Kramer Industries has cash of $39,000; net Accounts Receivable of $45,000; short-term investments of $12,000 and inventory of $31,000.

Describe their preferred influence strategies

Based on the documentary watched in class, how would you describe their preferred influence strategies?

What is the quick ratio for picasso paint supply

It also has $50,000 in current liabilities and $75,000 in long-term liabilities. What is the quick ratio for Picasso's Paint Supply?

Find unit product cost under absorption costing

Neef Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 84 Manufacturing costs

What is their qbi deduction for the year

Tara and Todd are married. Tara is a lawyer who operates her practice as a sole proprietorship. Todd works for a local architecture firm.

What amount of elige current year taxable income is

What amount of Elige's current year taxable income is allocated to Elige's S corporation short tax year based on the relative number of days

Rewrite, reorganize, add, and recast information

ewrite, reorganize, add, and recast information so that students can access the regular curriculum independently is__