Choose which portfolio is the optimal 0.405%. stock 1 MRNA MRNA MRNA MRNA MRNA stock 2 SBUX V FLATX BND SP500 0.422% 0.414% 0.347% 0.403% 0.419% return, of 0.134% 0.136% 0.131% 0.123% 0.133% 3.661% 3.686% 3.615% 3.514% 3.652% Op O MRNA, SP500 MRNA, FLATX MRNA, BND MRNA, V

Choose which portfolio is the optimal 0.405%. stock 1 MRNA MRNA MRNA MRNA MRNA stock 2 SBUX V FLATX BND SP500 0.422% 0.414% 0.347% 0.403% 0.419% return, of 0.134% 0.136% 0.131% 0.123% 0.133% 3.661% 3.686% 3.615% 3.514% 3.652% Op O MRNA, SP500 MRNA, FLATX MRNA, BND MRNA, V

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 3P: Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B...

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Concept explainers

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

Question

Choose which portfolio is the optimal risk-return relationship if your client's return preference is greater than
0.405%.
stock 1
MRNA
MRNA
MRNA
MRNA
MRNA
stock 2
SBUX
V
FLATX
BND
SP500
0.422%
0.414%
0.347% 0.403%
0.419%
return,
0.133%
o
0.134%
0.136%
0.131%
0.123%
3.661%
3.686%
3.615%
3.514%
3.652%
Op
MRNA, SP500
MRNA, FLATX
O MRNA, BND
MRNA, V

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