Under the following conditions, what are the expected returns for stocks A and B?

$\begin{array}{ll}
\lambda^{0}=0.035 & b_{a, 1}=1.00 \
k_{1}=0.05 & b_{a, 2}=1.40 \
k_{2}=0.06 & b_{b, 1}=1.70 \
&b_{b, 2}=0.65
\end{array}$

A) 14.8% and 13.8%
B) 19.8% and 29.5%
C) 16.0% and 19.8%
D) 16.9% and 15.9%
E) None of the above

Question

Under the following conditions, what are the expected returns for stocks A and B?

$\begin{array}{ll}
\lambda^{0}=0.035 & b_{a, 1}=1.00 \
k_{1}=0.05 & b_{a, 2}=1.40 \
k_{2}=0.06 & b_{b, 1}=1.70 \
&b_{b, 2}=0.65
\end{array}$

A) 14.8% and 13.8%
B) 19.8% and 29.5%
C) 16.0% and 19.8%
D) 16.9% and 15.9%
E) None of the above

Quizplus · Accepted Answer

The Answer of Under the following conditions, what are the expected returns for stocks A and B?

$\begin{array}{ll}
\lambda^{0}=0.035 & b_{a, 1}=1.00 \
k_{1}=0.05 & b_{a, 2}=1.40 \
k_{2}=0.06 & b_{b, 1}=1.70 \
&b_{b, 2}=0.65
\end{array}$

A) 14.8% and 13.8%
B) 19.8% and 29.5%
C) 16.0% and 19.8%
D) 16.9% and 15.9%
E) None of the above

Under the Following Conditions, What Are the Expected Returns for Stocks