Here is the Unit #6 Weekly Writing Assignment that you should submit to your Unit #6 Homework Assignment Folder.
Please submit your Unit #6 Writing Assignment in MS Word format with the following file name: LastNameFirstInitial_Unit 06_Writing Assignment.docx. For example, if you name is John Smith, the file name should be SmithJ_Unit06_Writing Assignment.docx.
If you have any questions or comments, please do not hesitate to contact me.
You have been provided the following data about the securities of three firms, the market portfolio and the risk-free-asset.
|Security||Expected Return||Standard Deviation||Correlation*||Beta|
|The Market Portfolio||.12||.20||(iv)||(v)|
|The Risk-Free Asset||.05||(vi)||(vii)||(viii)|
*With the market portfolio
Fill in the missing values in the table.
Is the stock of Firm A correctly priced according to the capital asset pricing model (CAPM)? What about the stock of Firm B? Firm C? If these securities are not correctly priced, what is your investment recommendation for someone with a well-diversified portfolio?