The revised estimate on the rate of return on
the stock would be:
Before
10% = α +[4%*1] + [6%*0.4]
α = 10% - 6.4%
α = 3.6%
With the changes:
3.6% + [5%*1] + [7%*0.4] = 3.6% + 5% + 2.8%
= 11.4%
The new rate of return is 11.4%
Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP,...
Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 3% and IR 6%. A stock with a beta of 1 on IP and 0.3 on IR currently is expected to provide a rate of return of 16%. If industrial production actually grows by 4%, while the inflation rate turns out to be 7%, what is your best guess for the rate of return...
Suppose that two factors have been identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 2%, and IR 2.0%. A stock with a beta of 0.9 on IP and 0.4 on IR currently is expected to provide a rate of return of 6%. If industrial production actually grows by 4%, while the inflation rate turns out to be 4.0%, what is your revised estimate of the expected...
Suppose that two factors have been identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 2%, and IR 2.0%. A stock with a beta of 0.9 on IP and 0.4 on IR currently is expected to provide a rate of return of 6%. If industrial production actually grows by 4%, while the inflation rate turns out to be 4.0%, what is your revised estimate of the expected...
Suppose two factors are identified for the US economy: the growth rate of industrial production, IP, and the inflation rate IR IP is expected to be 5% and IR 7%. A stock with a beta of 1 on IP and 0.6 on IR currently is expected o provide a rate of return o 14 t industrial production actually grows by 6%, while the ma on rate tums out to e 99 what s your est ess or e ate ofret...
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A stock with a beta of 0.8 has an expected rate of return of 12%. If the market return this year turns out to be 5 percentage points below expectations, what is your best guess as to the rate of return on the stock? Stock return %
A stock with a beta of 11 has an expected rate of return of 16%. If the market return this year turns out to be 10 percentage points below expectations, what your answer as a percent rounded to 1 decimal place.) t is your best guess as to the rate of return on the stock? (Do not round intermediate calculations. Enter 3.6 polnts lor 5 Next >