Question

A particular asset has a beta of 1.2 and an expected return of 10%. The expected return on the market portfolio is 13% and the risk-free rate is 5%.

The share is:

**--**

**Hint:**
Compare Expected Return to Required Return

A. overpriced

B. underpriced

C. appropriately priced

D. There is not enough information to answer the question.

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Answer #1

A particular asset has a beta of 1.2 and an expected return of
10%. The expected return on the market portfolio is 13% and the
risk-free rate is 5%. The asset is:
Select one:
a. under-priced
b. appropriately priced
c. overpriced
d. There is not enough information to answer the question

A particular asset has a beta of .90 and an expected return of
10%. Given that the expected return on the market portfolio is 13%
and the risk-free rate is 5%, is the stock appropriately
priced

#24 Stock A has a beta of 1.2 and an expected return of 12%.
Stock B has a beta of 0.7 and an expected return of 8%. If the
risk-free rate is 2% and the market risk premium is 8%, what is
true about the two stocks? A. Stock A is underpriced and stock
B is overpriced B. Both stocks are underpriced
C. Stock A is overpriced and stock
B is underpriced
D. Both stocks are correctly priced
E. Both...

Stock A has an expected return of 13% and a standard deviation
of 22%, while Stock B has an expected return of 15% and a standard
deviation of 25%. If an investor is less risk-averse, they will be
likely to choose…
A. Stock A
B. Stock B
Stock A has a beta of 1.8 and an expected return of 12%. Stock B
has a beta of 0.7 and an expected return of 7%. If the risk-free
rate is 2% and...

Security X has an expected rate of return of 13% AND A BETA OF
1.15. The risk-free is 5%, and the market expected rate of return
is 15%. According to the capital asset pricing model, security X is
_______.
a. fairly priced
b. overpriced
c. underpriced
d none of these answers
(I need assistance on how to calculate and conclude.)

The expected market return is 9%. The risk-free rate, 1.5%. Your
risky asset XYZ has a beta of 0.85 and an expected return of
10.50%. According to the CAPM model,
Select one:
a. Your asset XYZ is perfectly priced in the market.
b. Your asset XYZ is underpriced in the market.
c. No answer
d. Your asset XYZ is overpriced in the market.
e. There is not enough data to answer.

Stock A has a beta of 1.2 and an expected return of 10%. The
risk-free asset currently earns 4%. If a portfolio of the two
assets has an expected return of 6%, what is the beta of the
portfolio? A) 0.3 B) 0.4 C) 0.5 D) 0.6 E) 0.7

Asset
E(R)
Std. deviation
A
17%
50%
Market (M)
10%
20%
Above is the expected return and standard deviation of a stock A
and the market portfolio. The correlation coefficient between A and
the market portfolio (M) is 0.5. The risk-free rate is 4%
Based on CAPM, stock A is ____________ because it offers an
alpha of ____________.
A.
underpriced; 7%
B.
underpriced; 5.5%
C.
overpriced; 5.5%
D.
underpriced; 0.5%
E.
overpriced; -0.5%

What is the expected risk-free rate of return if Asset X, with a
beta of 1.2, has an expected return of 17 percent, and the expected
market return is 15 percent? A. 4% B. 6% C. 5% D. 4.5%

Question 1 You are analysing Yachi Industries. It has a beta of
1.2. The expected return on a market portfolio is 10%, and the risk
free rate is 4%. a. What is the expected return of Yachi? (5’) b.
If you want to diversify your investment risk, so you decide to
invest 60% of your money in Yachi, and the rest of your money in a
risk-free government bond. If you know the standard deviation of
Yachi is 10%, what...

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