Question

What happens to an expected portfolio return with a beta of 1.9 if the market risk...

What happens to an expected portfolio return with a beta of 1.9 if the market risk premium reduces from 8% to 6%?

a. It decreases by 2%

b. It decreases by 0.1%

c. It increases by 3.9%

d. It decreases by 3.8%

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
q20 Your portfolio has a beta of 1.2. The risk-free rate is 5%, and the market...
q20 Your portfolio has a beta of 1.2. The risk-free rate is 5%, and the market portfolio return is 15%. What happens to your portfolio's expected return if the portfolio's beta increases to 1.8, risk-free rate increases to 6%, but the market portfolio return decreases to 10%. Multiple Choice It increases from 13.2% to 17%. It decreases from 24% to 23%. It increases from 23% to 24%. It decreases from 17% to 13.2%. q21. f the EAR of interest is...
The expected return on the market is 12%; the risk-free rate is 3%; the beta of...
The expected return on the market is 12%; the risk-free rate is 3%; the beta of your portfolio is 1.17; and the standard deviation of your portfolio is 17%. Which of the following statements is true? A. The expected return on your portfolio is 1.17 times 12% B. The reward to risk ratio for your portfolio is 1.17/0.17. C. The market risk premium is 9%. D. There is not enough information to determine the expected return on your portfolio.
The Treasury bill rate is 3.9%, and the expected return on the market portfolio is 11.8%....
The Treasury bill rate is 3.9%, and the expected return on the market portfolio is 11.8%. Use the capital asset pricing model. a. What is the risk premium on the market? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) Risk premium             % b. What is the required return on an investment with a beta of 1.4? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)...
If the expected rate of return on the market portfolio is 14% and the risk free...
If the expected rate of return on the market portfolio is 14% and the risk free rate is 6% find the beta for a portfolio that has expected rate of return of 10%. What assumptions concerning this portfolio and or market condition do you need to make to calculate the portfolio’s beta? b. what percentage of this portfolio must an individual put into the market portfolio in order to achieve an expected return of 10%?
The risk-free return is 5.4% and the market risk premium is 12.3%. What is the expected...
The risk-free return is 5.4% and the market risk premium is 12.3%. What is the expected return for the following portfolio? (State your answer in percent with two decimal places.) Stock Beta Investment AAA 3.8 $500,000 BBB 2.6 $900,000 CCC 1.5 $3,000,000 DDD 1.2 $1,300,000
What is the expected return on the market portfolio at a time when the risk free...
What is the expected return on the market portfolio at a time when the risk free rate (e.g., T-Bill rate) is 4% and a stock with a beta of 1.5 is expected to yield 16%? What’s the risk premium for the stock
An investor expects a return of 18% on his portfolio with a beta of 1.25. If...
An investor expects a return of 18% on his portfolio with a beta of 1.25. If the expected market risk premium increases from 8% to 10%, what return should he now expect on the portfolio? Multiple Choice 20.0% 20.5% 22.5% 26.0%
The Treasury bill rate is 5%, and the expected return on the market portfolio is 13%....
The Treasury bill rate is 5%, and the expected return on the market portfolio is 13%. According to the capital asset pricing model: a. What is the risk premium on the market? b. What is the required return on an investment with a beta of 1.8? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) c. If an investment with a beta of 0.6 offers an expected return of 8.8%, does it have...
Consider the following information: Portfolio Expected Return Beta Risk-free 8 % 0 Market 10.2 1.0 A...
Consider the following information: Portfolio Expected Return Beta Risk-free 8 % 0 Market 10.2 1.0 A 8.2 0.7 a. Calculate the expected return of portfolio A with a beta of 0.7. (Round your answer to 2 decimal places.) b. What is the alpha of portfolio A. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) c. If the simple CAPM is valid, is the above situation possible? Yes No
A portfolio invests in a risk-free asset and the market portfolio has an expected return of...
A portfolio invests in a risk-free asset and the market portfolio has an expected return of 7% and a standard deviation of 10%. Suppose risk-free rate is 5%, and the standard deviation on the market portfolio is 22%. For simplicity, assume that correlation between risk-free asset and the market portfolio is zero and the risk-free asset has a zero standard deviation. According to the CAPM, which of the following statement is/are correct? a. This portfolio has invested roughly 54.55% in...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT