Solutions to Chapter 1

9. a. A diversified investor will find the lowest-beta stock safest. This is Newmong Mining, which has a beta of 0.84. b. McDonald’s has the lowest total volatility; the standard deviation of its returns is 20.3%. c. ( = (2.46 + 0.84+ 1.45)/3 = 1.58. d. The portfolio will have the same beta as Ford … ................
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