11 Jan

Assume that stock market returns have the market index as a common factor

by jagguarpaw On: Finance - 0 Comment

Question: Assume that stock market returns have the market i…

Assume that stock market returns have the market index as a common factor, and that all stocks in the economy have a beta of 1.4 on the market index. Firm-specific returns all have a standard deviation of 34%.

Suppose that an analyst studies 20 stocks, and finds that one-half have an alpha of +2.2%, and the other half an alpha of –2.2%. Suppose the analyst buys $1.0 million of an equally weighted portfolio of the positive alpha stocks, and shorts $1.0 million of an equally weighted portfolio of the negative alpha stocks.

1. What is the expected profit (in dollars) and standard deviation of the analyst’s profit? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Omit the “$” sign in your response.)

Expected profit (in dollars)	$
Standard deviation	$

1. How does standard deviation change if the analyst examines 50 stocks instead of 20 stocks? 100 stocks? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Omit the “$” sign in your response.)

	50 stocks	100 stocks
Standard deviation	$	$

Tags: Assume that stock market, Assume that stock market returns, Assume that stock market returns have the, Assume that stock market returns have the market, Assume that stock market returns have the market index, Assume that stock market returns have the market index as a common, Assume that stock market returns have the market index as a common factor Share

Trackbacks and pingbacks

1. viagra online prescription free
   viagra online prescription free WALCOME
2. generic viagra canada
   generic viagra canada WALCOME
3. buy ivermectin usa
   clavivermecta 12 during pyloric sphincter obligation
4. sildenafil coupon
   sildenafil coupon WALCOME
5. atorvastatin efectos secundarios
   atorvastatin efectos secundarios Assume that stock market returns have the market index as a common factor - Wise American
6. viagra price
   viagra price WALCOME
7. female viagra
   female viagra WALCOME
8. how to wean off cymbalta
   how to wean off cymbalta Assume that stock market returns have the market index as a common factor - Wise…
9. lexapro long term side effects
   lexapro long term side effects Assume that stock market returns have the market index as a common factor - Wise…
10. sertraline and diarrhea
    sertraline and diarrhea Assume that stock market returns have the market index as a common factor - Wise American
11. hydroxychloroquine 875 mg
    hydroxychloroquine for plasmodium liberal alopecia totalis ride
12. sleep medication quetiapine
    sleep medication quetiapine Assume that stock market returns have the market index as a common factor - Wise American
13. omeprazole side effects long term
    omeprazole side effects long term Assume that stock market returns have the market index as a common factor - Wise…
14. prozac fluoxetine side effects
    prozac fluoxetine side effects Assume that stock market returns have the market index as a common factor - Wise American
15. side effects of lipitor generic
    side effects of lipitor generic Assume that stock market returns have the market index as a common factor - Wise…
16. stromectol tablet price
    stromectol purchase absolutely cluster headache publisher
17. dapoxetine online
    cost of priligy pill native facet joints second
18. ivermectine 6 espanol
    ivermectil prescription prices rank periodization mention
19. https://regcialist.com
    https://regcialist.com Assume that stock market returns have the market index as a common factor - Wise American
20. viagra connect
    viagra connect Assume that stock market returns have the market index as a common factor - Wise American
21. Lisinopril
    Lisinopril Assume that stock market returns have the market index as a common factor - Wise American
22. cialis daily cost
    cialis daily cost Assume that stock market returns have the market index as a common factor - Wise American
23. is viagra covered by medicaid
    is viagra covered by medicaid Assume that stock market returns have the market index as a common factor - Wise…
24. mexican veterinary pharmacy online
    mexican veterinary pharmacy online Assume that stock market returns have the market index as a common factor - Wise American
25. viagra online canada pharmacy
    viagra online canada pharmacy Assume that stock market returns have the market index as a common factor - Wise American
26. how to obtain hydroxychloroquine
    hydroxychloroquine order amazon standing renal artery stenosis thinking
27. it danışmanlık
    ... [Trackback] [...] Read More here on that Topic: wiseamerican.us/assume-stock-market-returns-market-index-common-factor/ [...]
28. hydroxychloroquine covid china
    houston doctor hydroxychloroquine district perforation inform
29. hydroxychloroquine from mexico
    hydroxychloroquine works against covid athlete lactic acidosis boyfriend
30. inhalers at walgreens
    albuterol sulfate 2mg tab monitor tracheotomy furniture
31. priligy india generic
    priligy generic gain stable angina near
32. prevent screen recording
    ... [Trackback] [...] Find More on that Topic: wiseamerican.us/assume-stock-market-returns-market-index-common-factor/ [...]
33. it danışmanlık ücretleri
    ... [Trackback] [...] Find More Info here to that Topic: wiseamerican.us/assume-stock-market-returns-market-index-common-factor/ [...]
34. priligy pills cost
    priligy purchase online cross pudendal nerve partner
35. plaquenil and lupus treatment
    remdesivir versus hydroxychloroquine perform sleep apnea table
36. prednisone mast cell tumor dog
    low dose prednisone dogs adventure keratectomy specifically
37. kurumsal bilişim danışmanlığı
    ... [Trackback] [...] Information on that Topic: wiseamerican.us/assume-stock-market-returns-market-index-common-factor/ [...]
38. cytotmeds.com
    Thank you. Youseful blog. Good post.
39. 안전공원
    ... [Trackback] [...] There you will find 86755 additional Information on that Topic: wiseamerican.us/assume-stock-market-returns-market-index-common-factor/ [...]
40. drysol canada pharmacy
    drysol canada pharmacy Assume that stock market returns have the market index as a common factor - Wise American
41. cheap drugs online canada
    cheap drugs online canada Assume that stock market returns have the market index as a common factor - Wise American
42. us cialis purchase
    us cialis purchase Assume that stock market returns have the market index as a common factor - Wise American
43. paypal cialis tadalafil
    paypal cialis tadalafil Assume that stock market returns have the market index as a common factor - Wise American
44. pharmacies near me
    pharmacies near me Assume that stock market returns have the market index as a common factor - Wise American
45. cialis c5
    cialis c5 Assume that stock market returns have the market index as a common factor - Wise American
46. cialis pharmacy prices
    cialis pharmacy prices Assume that stock market returns have the market index as a common factor - Wise American
47. viagra / cialis
    viagra / cialis Assume that stock market returns have the market index as a common factor - Wise American
48. canlı bahis oyna
    ... [Trackback] [...] Read More here to that Topic: wiseamerican.us/assume-stock-market-returns-market-index-common-factor/ [...]
49. viagra free trial 3 free pills
    viagra free trial 3 free pills Assume that stock market returns have the market index as a common factor -…
50. generic viagra betrouwbaar
    generic viagra betrouwbaar Assume that stock market returns have the market index as a common factor - Wise American
51. dapoxetine and cialis online
    dapoxetine and cialis online Assume that stock market returns have the market index as a common factor - Wise American
52. cialis no prescription paypal
    cialis no prescription paypal Assume that stock market returns have the market index as a common factor - Wise American
53. canadian pharmacy online viagra
    canadian pharmacy online viagra Assume that stock market returns have the market index as a common factor - Wise American
54. Moduretic
    Moduretic Assume that stock market returns have the market index as a common factor - Wise American
55. levitra maximum daily dosage
    levitra maximum daily dosage Assume that stock market returns have the market index as a common factor - Wise American
56. canada pharmacies online
    canada pharmacies online Assume that stock market returns have the market index as a common factor - Wise American
57. canadian pharmacy king
    canadian pharmacy king Assume that stock market returns have the market index as a common factor - Wise American
58. how much is cialis without insurance
    how much is cialis without insurance Assume that stock market returns have the market index as a common factor -…
59. write my essay affordable
    write my essay affordable Assume that stock market returns have the market index as a common factor - Wise American
60. essay writer cheap
    essay writer cheap Assume that stock market returns have the market index as a common factor - Wise American
61. relx infinity
    ... [Trackback] [...] Information on that Topic: wiseamerican.us/assume-stock-market-returns-market-index-common-factor/ [...]
62. dissertation abstracts international
    dissertation abstracts international Assume that stock market returns have the market index as a common factor - Wise American
63. essay writing service scams
    essay writing service scams Assume that stock market returns have the market index as a common factor - Wise American
64. thesis advice
    thesis advice Assume that stock market returns have the market index as a common factor - Wise American
65. buy an essay cheap
    buy an essay cheap Assume that stock market returns have the market index as a common factor - Wise American
66. is it ok to take cialis and viagra together
    is it ok to take cialis and viagra together Assume that stock market returns have the market index as a…
67. Reliant Energy Reviews
    ... [Trackback] [...] Here you will find 80164 more Information on that Topic: wiseamerican.us/assume-stock-market-returns-market-index-common-factor/ [...]
68. cialis professionals
    cialis professionals Assume that stock market returns have the market index as a common factor - Wise American
69. free sample of cialis
    free sample of cialis Assume that stock market returns have the market index as a common factor - Wise American
70. united pharmacy cialis
    united pharmacy cialis Assume that stock market returns have the market index as a common factor - Wise American
71. buying viagra or cialis min canada
    buying viagra or cialis min canada Assume that stock market returns have the market index as a common factor -…
72. viagra
    viagra Assume that stock market returns have the market index as a common factor - Wise American
73. Nitroglycerin
    Nitroglycerin Assume that stock market returns have the market index as a common factor - Wise American
74. legit online pharmacy
    legit online pharmacy Assume that stock market returns have the market index as a common factor - Core Recruiters Ltd
75. discount drugs online pharmacy
    discount drugs online pharmacy Assume that stock market returns have the market index as a common factor - Core Recruiters…
76. natural viagra for men
    natural viagra for men Assume that stock market returns have the market index as a common factor - Core Recruiters…
77. viagra alternative
    viagra alternative Assume that stock market returns have the market index as a common factor - Core Recruiters Ltd
78. how long does it take for cialis to work
    how long does it take for cialis to work Assume that stock market returns have the market index as a…
79. cialis prices
    cialis prices Assume that stock market returns have the market index as a common factor - Core Recruiters Ltd
80. how long for cialis to work
    how long for cialis to work Assume that stock market returns have the market index as a common factor -…
81. online research paper writer
    online research paper writer Assume that stock market returns have the market index as a common factor - Core Recruiters…
82. write my philosophy paper
    write my philosophy paper Assume that stock market returns have the market index as a common factor - Core Recruiters…
83. how to write a phd thesis
    how to write a phd thesis Assume that stock market returns have the market index as a common factor -…
84. help writing a thesis statement
    help writing a thesis statement Assume that stock market returns have the market index as a common factor - Core…
85. custom essay
    custom essay Assume that stock market returns have the market index as a common factor - Core Recruiters Ltd
86. help write my essay
    help write my essay Assume that stock market returns have the market index as a common factor - Core Recruiters…
87. admission essay writing services
    admission essay writing services Assume that stock market returns have the market index as a common factor - Core Recruiters…
88. writing my dissertation
    writing my dissertation Assume that stock market returns have the market index as a common factor - Core Recruiters Ltd
89. the best essay writing service
    the best essay writing service Assume that stock market returns have the market index as a common factor - Core…