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Use this information for the following three questions A colleague has estimated the index model using excess returns for two companies Cincinatti Ltd and Columbus Ltd. The Beta of Cincinatti

Use this information for the following three questions A colleague has estimated the index model, using excess returns, for two companies; Cincinatti Ltd and Columbus Ltd. The Beta of Cincinatti Ltd is 1.05, and the standard deviation of its excess returns is 32.2%. The Beta of Columbus Ltd is 0.75, and the standard deviation of its excess returns is 25.1%. The material provided also indicates that Cincinatti Ltd's firm-specific standard deviation is 25.60%. The standard deviation of the market is: Select one: O a. 28.65% b. 14.33% c. 32.98% d. 18.60% e. 16.50% o What is the firm-specific standard deviation of Columbus Ltd? Select one: O a. 3.50% b. 13.95% O c. 18.83% d. 20.87% O e. 12.89%

 

May 01 2020 View more View Less

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