Question
The following table shows betas for several companies. Calculate each stock’s expected rate of return using...
The following table shows betas for several companies. Calculate each stock’s expected rate of return using the CAPM. Assume the risk-free rate of interest is 4%. Use a 6% risk premium for the market portfolio. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
|
|||||||||||||||||||||
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
The Treasury bill rate is 3.3%, and the expected return on the market portfolio is 10.3%....
The Treasury bill rate is 3.3%, and the expected return on the
market portfolio is 10.3%. 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 1.7? (Do not round intermediate
calculations. Enter your answer as a percent rounded to 2 decimal
places.)...
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.)...
A stock has a beta of 0.7 and an expected return of 11.1 percent. If the...
A stock has a beta of 0.7 and an expected return of 11.1
percent. If the risk-free rate is 4.7 percent, what is the market
risk premium? (Do not round intermediate calculations. Enter your
answer as a percent rounded to 2 decimal places.)
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...
The Treasury bill rate is 6%, and the expected return on the market portfolio is 14%....
The Treasury bill rate
is 6%, and the expected return on the market portfolio is 14%.
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 1.4? (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 8.4%, does it have...
Problem 13-15 Using CAPM [LO4] A stock has an expected return of 10.5 percent, its beta...
Problem 13-15 Using CAPM [LO4] A stock has an expected return of
10.5 percent, its beta is 1.15, and the risk-free rate is 5
percent. What must the expected return on the market be? (Do not
round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.) Market expected return
%
The following table shows the sensitivity of four stocks to the three Fama−French factors. Assume the...
The following table shows the sensitivity of four stocks to the
three Fama−French factors. Assume the interest rate is 3%, the
expected risk premium on the market is 6%, the expected risk
premium on the size factor is 3.2%, and the expected risk premium
on the book-to-market factor is 5.1%.
Boeing
Campbell Soup
Dow Chemical
Apple
Market
1.20
.68
1.12
1.15
Size
−.56
−.53
.35
−.50
Book-to-market
−.83
.21
.20
−.67
Calculate the expected return on each stock. (Do not...
The following table shows the sensitivity of four stocks to the three Fama−French factors. Assume the...
The following table shows the sensitivity of four stocks to the
three Fama−French factors. Assume the interest rate is 5%, the
expected risk premium on the market is 8%, the expected risk
premium on the size factor is 3.7%, and the expected risk premium
on the book-to-market factor is 3.9%.
Boeing
Campbell Soup
Dow Chemical
Apple
Market
1.31
.90
1.23
1.26
Size
−.67
−.51
.50
−.53
Book-to-market
−.68
.21
.31
−.98
Calculate the expected return on each stock. (Do not...
Consider the following information on three stocks: Rate of Return If State OccursState of EconomyProbability of...
Consider the following information on three
stocks:
Rate of Return If State OccursState of
EconomyProbability of State
of EconomyStock AStock BStock CBoom
.20 .20 .32 .54 Normal
.45 .18 .16 .14 Bust
.35 .02 −.34 −.42
a-1 If your portfolio is invested 40 percent each in A and B
and 20 percent in C, what is the portfolio expected return? (Do
not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
Portfolio expected return
%
a-2 What is the variance? (Do...
Consider the following information about three stocks: Rate of Return If State Occurs State of...
Consider the following information about three stocks:
Rate of Return If State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
0.20
0.24
0.36
0.58
Normal
0.50
0.20
0.18
0.16
Bust
0.30
0.04
?0.36
?0.45
a-1
If your portfolio is invested 40 percent each in A and B and 20
percent in C, what is the portfolio expected return? (Do
not round intermediate calculations. Enter the answer as a percent
rounded...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 30 minutes ago
asked 42 minutes ago
asked 47 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 2 hours ago
asked 2 hours ago
asked 2 hours ago