Question 19 5 pts Assume the following data for a stock: Beta = 0.5; risk-free rate...
Security X has a rate of return of 13% and a beta of 1.15. The risk-free rate is 5% and the market expected rate of return is 10%. According to the capital asset pricing model, security X is 1) fairly priced 2) underpriced 3) overpriced 4) None of the answers are correct Security X has a rate of return of 13% and a beta of 1.15. The risk-free rate is 5% and the market expected rate of return is 10%....
Help
Question 1 5 pts Centex Energy has a beta of 1.45. Assume that risk-free rate and the expected rate of return on the market are 2% and 12% respectively. According to the capital asset pricing model (CAPM), what is the expected rate of return for this company's stock? Your answer should be between 11.45 and 18.55, rounded to 2 decimal places, with no special characters. Question 2 5 pts
Assume the market rate of return is 10.1 percent and the risk-free rate of return is 3.2 percent. Lexant stock has 2 percent less systematic risk than the market and has an actual return of 10.2 percent. This stock: A. is underpriced. B. is correctly priced. C. will plot below the security market line. D. will plot on the security market line. E. will plot to the right of the overall market on a security market line graph.
The risk-free rate is 6% and the expected rate of return on the market portfolio is 13%.
a. Calculate the required rate of return on a security with a beta of 1.25. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. If the security is expected to return 16%, is it overpriced or underpriced?
Suppose the yield on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected return required by the market for a portfolio with a beta of 1 is 15.0%. According to the capital asset pricing model: a. What is the expected return on the market portfolio? (Round your answer to 1 decimal place.) Expected rate of return ſ b. What would be the expected return on a zero-beta stock? Expected rate of return % Suppose...
A stock has an expected return of 9%. What is its beta? Assume
the risk-free rate is 6% and the expected rate of return on the
market is 12%. (Negative value should be indicated by a
minus sign. Round your answer to 2 decimal places.)
Problem 7-23 A stock has an expected return of 9%. What is its beta? Assume the risk-free rate is 6% and the expected rate of return on the market is 12%. (Negative value should be...
1. You are analyzing a common stock with a beta of 1.5. The risk-free rate of interest is 5 percent and the expected return on the market is 15 percent. If the stock's return based on its market price is 21.5%, the stock is overvalued since the expected return is above the SML. the stock is undervalued since the expected return is above the SML. the stock is correctly valued since the expected return is above the SML. the stock...
A stock has an expected return of 8 percent, its beta is 0.5, and the risk-free rate is 3.6 percent. The expected return on the market must be Question 2 options: 10.2% 14.5% 15.2% 11.1% 12.4%
Security X has an expected rate of return of 21% and a beta of 1.85. The risk-free rate is 3%, and the market expected rate of return is 12%. According to the capital asset pricing model, security X is _________. A. overpriced B. none of these answers C. underpriced D. fairly priced
Problem 8 Intro A stock has a beta of 1.4. The risk-free rate is 2%. Assume that the CAPM holds. Part 1 18 Attempt 1/10 for 10 pts. What is the expected return for the stock if the expected return on the market is 11%? 3+ decimals Submit IB Attempt 1/10 for 10 pts. Part 2 What is the expected return for the stock if the expected market risk premium is 11%? 3+ decimals Submit