The Treasury bill rate is 6%, and the expected return on the market portfolio is 10%. According to the capital asset pricing model:
d. If the market expects a return of 10.8% from stock X, what is its beta? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Expected return = risk free rate + (market return-risk free rate) *beta
10.8 % = 6% + ( 10% - 6 %)* beta
10.8 % - 6% = 4% *beta
beta =1.20
Hence the correct answer is 1.20
The Treasury bill rate is 6%, and the expected return on the market portfolio is 10%....
The Treasury bill rate is 4%, 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 0.7 offers an expected return of 9.0%, does it have...
The Treasury bill rate is 4%, and the expected return on the market portfolio is 11%. 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 1.6? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) c. If an investment with a beta of 0.8 offers an expected return of 8.6%, does it have...
The Treasury bill rate is 4%, and the expected return on the market portfolio is 11%. 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 1.6? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) c. If an investment with a beta of 0.8 offers an expected return of 8.6%, does it have...
The Treasury bill rate is 7%, and the expected return on the market portfolio is 12%. 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 1.6? (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 8.0%, does it have a positive or negative NPV?d. If the market...
. The Treasury bill rate (i.e. risk-free rate) is 2.5%, and the expected return on the market portfolio is 12%. Using the capital asset pricing model: a. What is the risk premium on the market? b. What is the required rate of return on an investment with a beta of 1.15? c. If an investment with a beta of 0.80 offers an expected return of 10.5%, does it have a positive NPV?
Suppose the risk-free rate is 4.3 percent and the market portfolio has an expected return of 11 percent. The market portfolio has a variance of .0392. Portfolio Z has a correlation coefficient with the market of .29 and a variance of .3295 According to the capital asset pricing model, what is the expected return on Portfolio Z? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16
Suppose that the Treasury bill rate is 5% and the expected return on the market stays at 9%. Use the following information. Stock Beta (β) Caterpillar 1.73 Dow Chemical 1.52 Ford 1.33 Microsoft 0.91 Apple 0.94 Johnson & Johnson 0.62 Walmart 0.58 Campbell Soup 0.28 Consolidated Edison 0.20 Newmont 0.00 a. Calculate the expected return from Johnson & Johnson. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expected return % b. Find...
Suppose that the Treasury bill rate is 6% rather than 2%. Assume the expected return on the market stays at 9%. Use the following information. Stock Beta (β) United States Steel 3.01 Amazon 1.47 Southwest Airlines 1.35 The Travelers Companies 1.26 Tesla 0.94 ExxonMobil 0.82 Johnson & Johnson 0.81 Coca-Cola 0.70 Consolidated Edison 0.11 Newmont 0.10 Calculate the expected return from Johnson & Johnson. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)...
Suppose that the Treasury bill rate is 4% and the expected return on the market stays at 9%. Use the following information. Stock Beta (β) Caterpillar 1.68 Dow Chemical 1.63 Ford 1.42 Microsoft 0.96 Apple 0.93 Johnson & Johnson 0.55 Walmart 0.47 Campbell Soup 0.37 Consolidated Edison 0.19 Newmont 0.00 a. Calculate the expected return from Johnson & Johnson. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expected return % b. Find...
Suppose that the Treasury bill rate is 6% rather than 2 %. Assume the expected return on the market stays at 9%. Use the following information. Beta (B) Stock United States Steel 3.05 1.43 Amazon Southwest Airlines 1.31 The Travelers Companies Tesla 1.22 0.98 ExxonMobil 0.86 Johnson & Johnson 0.85 Соcа-Сola 0.66 Consolidated Edison 0.15 0.10 Newmont a. Calculate the expected return from Johnson & Johnson. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2...