A Moving to another question will save this response.Quèstion 12What is the covariance of returns between stocks A and B? Expected returm of A is 30% and B's expected retum = 23.333333%YearRetum AReturn B201740%55%201630%35%201520%20%O 0.025O 0.07O None of the listed items is correctO 0.095A Moving to another question will save this response.MacBook AirescF2F3FSF6F7%23$&*238QWETYASDGZCValtptioncommand* 00つ

Data given: Expected return of A =30% Expected return of B = 23.333333% Year Return A Return B…

Quèstion 12 What is the covariance of returns between stocks A and B? Expected retum of A is 30% and B's expected retum 23.333333% Year Retum A Return B 2017 40% 55% 2016 bo% 35% 2015 20% 20% O 0.025 00 O 0.07 O None of the listed items is correct O 0.095

Quèstion 12 What is the covariance of returns between stocks A and B? Expected retum of A is 30% and B's expected retum 23.333333% Year Retum A Return B 2017 40% 55% 2016 bo% 35% 2015 20% 20% O 0.025 00 O 0.07 O None of the listed items is correct O 0.095

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 8P

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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.

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