Question

ABC stock has a required return of 20%. The expected market return is 15% and the...

ABC stock has a required return of 20%. The expected market return is 15% and the risk-free rate is 5%. Calculate the beta of ABC stock. (Make sure to show your work. No Work, No Point)
a. 1
b. 1.5
c. 2
d. 2.5
e. 3

Homework Answers

Answer #1

Ans is b. 1.5

Please upvote if the ans is helpful.. thanks.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A stock has a beta of 0.79, the expected return on the market is 11%, and...
A stock has a beta of 0.79, the expected return on the market is 11%, and the risk-free rate is 1.5%. Calculate the expected return on the stock. (Enter percentages as decimals and round to 4 decimals) A stock has an expected return of 20%, the risk-free rate is 1.5%, and the market risk premium is 8%. Calculate the beta of this stock. (Round to 3 decimals) A stock has an expected return of 10%, its beta is 0.59, and...
You are considering investing in Stock A which has an expected return of 15% and a...
You are considering investing in Stock A which has an expected return of 15% and a Beta of 1.5 or in Stock B which has an expected return of 8% and a Beta of 0.5. The risk-free rate is 4%. Which investment would you prefer? Show Calculation (3 pts)
Consider two stocks, A and B. Stock A has an expected return of 10% and a...
Consider two stocks, A and B. Stock A has an expected return of 10% and a beta of 1.1. Stock B has an expected return of 16% and a beta of 1.2. The market degree of risk aversion, A, is 4. The variance of return on the market portfolio is 0.0175. The risk-free rate is 5%. Required: (4*2.5 = 10pts) A. What is the expected return of the market? B. Using the CAPM, calculate the expected return of stock A....
Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard...
Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock’s coefficient of variation. b. Which stock is riskier for a diversified investor? c. Calculate each stock’s required rate of return. d. On the basis of the two...
Consider a stock of ABC Corporation whose CAPM beta is 2.5. The expected annual return on...
Consider a stock of ABC Corporation whose CAPM beta is 2.5. The expected annual return on the market is 12.25% and the annual risk-free rate is 2.5%. The annual volatility of the market is 22.55% and the annual volatility of the stock is 62.33%. Find the annual cost-of-capital for the stock and the correlation between the return on the market and the ABC Corp. stock.
A stock has an expected return of 12.4 percent and a beta of 1.37. The market...
A stock has an expected return of 12.4 percent and a beta of 1.37. The market expected return is 10 percent. What must the risk-free rate be? Fill in the values in the spreadsheet. Input area: Stock E(R) 12.40% Stock beta          1.32 Market E(R) 10.00% Output area: Risk-free
The expected return on Bevo stock is 13.8 percent. If the expected return on the market...
The expected return on Bevo stock is 13.8 percent. If the expected return on the market is 11 percent and the beta for Bevo is 1.5, then what is the risk-free rate? A) 4.80% B) 5.40% C) 6.70% D) 7.50%
Stock ABC has an expected return of 6.47%, based upon a beta of 1.15. The risk-free...
Stock ABC has an expected return of 6.47%, based upon a beta of 1.15. The risk-free rate is 2.58%. If the actual return on Stock ABC turns out to be 8.55% and the actual return on the market turns out to be 7.58%, what portion of the unexpected return can be attributed to unsystematic risk?
MCQ no need for explanation ABC Corporation wishes to determine the required return on asset Z,...
MCQ no need for explanation ABC Corporation wishes to determine the required return on asset Z, which has a beta of 1.5. The risk-free rate of return is 7%; the return on the market portfolio of assets is 11%. What is the required rate of return using CAPM? * a) 11% b) 13% c) 14% d) 15% e) None of the above A portfolio comprises two securities and the expected return on them is 11% and 15% respectively. Determine return...
Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard...
Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock’s coefficient of variation. b. Which stock is riskier for a diversified investor? c. Calculate each stock’s required rate of return. d. On the basis of the two...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT