Homework Answers
Calculate the beta and expected return as follows:
Formulas:
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Problem 17 Intro You've assembled the following portfolio: Stock Beta Portfolio weight 1 1.6 0.2 2...
Problem 17 Intro You've assembled the following portfolio: Stock Beta Portfolio weight The expected market return...
Problem 17 Intro You've assembled the following portfolio: Stock Beta Portfolio weight The expected market return is 5% and the risk-free rate is 2%. Assume that the CAPM holds. Part 1 Attempt 1/5 for 10 pts. What is the beta of the portfolio? 2+ decimals Submit VB Attempt 1/5 for 10 pts. Part 2 What is the expected return of your portfolio? 3. decimals Submit
Problem 18 Intro We know the following expected returns for stock A and the market portfolio,...
Problem 18 Intro We know the following expected returns for stock A and the market portfolio, given different states of the economy: State (s) Recession Normal Expansion Probability E(ras) E(TM,s) | 0.2 -0.06 0.02 0.5 0.09 0.05 0.3 0.17 0.09 The risk-free rate is 0.02. Part 1 IB - Attempt 3/5 for 10 pts. Assuming the CAPM holds, what is the beta for stock A? 2+ decimals Submit
Problem 18 Intro We know the following expected returns for stock A and the market portfolio,...
Problem 18 Intro We know the following expected returns for stock A and the market portfolio, given different states of the economy: State (s) Recession Normal Expansion Probability EAJ Elm,s) 0.3 -0.03 0.01 0.5 0.12 0.04 0.2 0.2 0.08 The risk-free rate is 0.02. Attempt 2/5 for 8 pts. Part 1 B Assuming the CAPM holds, what is the beta for stock A? 2+ decimals Submit About Blog Dorvassignment assignment7884 Contact FAQ Privacy Policy Accepl 2012 - 2019
Problem 8 Intro A stock has a beta of 1.4. The risk-free rate is 2%. Assume...
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
Problem 2 Intro We know the following expected returns for stocks A and B.glven different states...
Problem 2 Intro We know the following expected returns for stocks A and B.glven different states of the economy: 0.04 State (s) Probability E(ra) Ers,s) Recession 0.2 -0.1 Normal 0.5 0.08 0.05 Expansion 0.3 0.18 0.07 - Attempt 1/5 for 10 pts. Part 1 What is the expected return for stock A? 3+ decimals Submit Attempt 175 for 10 pts. Part 2 What is the expected return for stock B? Submit Problem 9 Intro You have $100,000 to invest and...
Problem 12 Intro You've assembled the following portfolio: Stock Expected return Portfolio weight 6.5% 30% 11.9% 18.3%...
Problem 12 Intro You've assembled the following portfolio: Stock Expected return Portfolio weight 6.5% 30% 11.9% 18.3% Part 1 1 Attempt 2/5 for 10 pts. What is the weight for stock 3 if you want to achieve an expected portfolio return of 11%? 3+ decimals Submit
Problem 16 Intro Use the expected return-beta equation from the CAPM. Part 3 IB - Attempt...
Problem 16 Intro Use the expected return-beta equation from the CAPM. Part 3 IB - Attempt 2/5 for 10 pts. What is beta if the risk-free rate is 3%, the expected return 12% and the expected market return 9%? 2+ decimals Submit 18 | Part 4 Attempt 1/5 for 10 pts. What is the expected market return if the risk-free rate is 3%, beta 1 and the expected return 12%? 3+ decimals Submit
Problem 19 Intro Assume that the CAPM holds. One stock has an expected return of 8%...
Problem 19 Intro Assume that the CAPM holds. One stock has an expected return of 8% and a beta of 0.5. Another stock has an expected return of 13% and a beta of 1.5. Part 1 IB - Attempt 1/10 for 10 pts. What is the expected return on the market? 3+ decimals Submit
Intro The table below shows information for 3 stocks. Security Beta Risk-free rate Expected market return...
Intro The table below shows information for 3 stocks. Security Beta Risk-free rate Expected market return 1.8 Stock 1 0.02 0.06 1.2 Stock 2 0.035 0.06 Stock 3 0.4 0.015 0.06 The risk-free rates are different because they were measured in different years. Calculate the expected (or required) return for each stock, using the Capital Asset Pricing Model (CAPM). Part 1 B Attempt 1/5 for 10 pts. What is the expected return for stock 1? 3+ decimals Submit Part 2...
Problem 19 Intro Assume that the CAPM holds. One stock has an expected return of 10%...
Problem 19 Intro Assume that the CAPM holds. One stock has an expected return of 10% and a beta of 0.3. Another stock has an expected return of 14% and a beta of 1.5. IB Attempt 4/10 for 5 pts. Part 1 What is the expected return on the market? 3+ decimals Submit
Problem 17 Intro You've assembled the following portfolio: Stock Beta Portfolio weight The expected market return is 5% and the risk-free rate is 2%. Assume that the CAPM holds. Part 1 Attempt 1/5 for 10 pts. What is the beta of the portfolio? 2+ decimals Submit VB Attempt 1/5 for 10 pts. Part 2 What is the expected return of your portfolio? 3. decimals Submit
Problem 18 Intro We know the following expected returns for stock A and the market portfolio, given different states of the economy: State (s) Recession Normal Expansion Probability E(ras) E(TM,s) | 0.2 -0.06 0.02 0.5 0.09 0.05 0.3 0.17 0.09 The risk-free rate is 0.02. Part 1 IB - Attempt 3/5 for 10 pts. Assuming the CAPM holds, what is the beta for stock A? 2+ decimals Submit
Problem 18 Intro We know the following expected returns for stock A and the market portfolio, given different states of the economy: State (s) Recession Normal Expansion Probability EAJ Elm,s) 0.3 -0.03 0.01 0.5 0.12 0.04 0.2 0.2 0.08 The risk-free rate is 0.02. Attempt 2/5 for 8 pts. Part 1 B Assuming the CAPM holds, what is the beta for stock A? 2+ decimals Submit About Blog Dorvassignment assignment7884 Contact FAQ Privacy Policy Accepl 2012 - 2019
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
Problem 2 Intro We know the following expected returns for stocks A and B.glven different states of the economy: 0.04 State (s) Probability E(ra) Ers,s) Recession 0.2 -0.1 Normal 0.5 0.08 0.05 Expansion 0.3 0.18 0.07 - Attempt 1/5 for 10 pts. Part 1 What is the expected return for stock A? 3+ decimals Submit Attempt 175 for 10 pts. Part 2 What is the expected return for stock B? Submit Problem 9 Intro You have $100,000 to invest and...
Problem 12 Intro You've assembled the following portfolio: Stock Expected return Portfolio weight 6.5% 30% 11.9% 18.3% Part 1 1 Attempt 2/5 for 10 pts. What is the weight for stock 3 if you want to achieve an expected portfolio return of 11%? 3+ decimals Submit
Problem 16 Intro Use the expected return-beta equation from the CAPM. Part 3 IB - Attempt 2/5 for 10 pts. What is beta if the risk-free rate is 3%, the expected return 12% and the expected market return 9%? 2+ decimals Submit 18 | Part 4 Attempt 1/5 for 10 pts. What is the expected market return if the risk-free rate is 3%, beta 1 and the expected return 12%? 3+ decimals Submit
Problem 19 Intro Assume that the CAPM holds. One stock has an expected return of 8% and a beta of 0.5. Another stock has an expected return of 13% and a beta of 1.5. Part 1 IB - Attempt 1/10 for 10 pts. What is the expected return on the market? 3+ decimals Submit
Intro The table below shows information for 3 stocks. Security Beta Risk-free rate Expected market return 1.8 Stock 1 0.02 0.06 1.2 Stock 2 0.035 0.06 Stock 3 0.4 0.015 0.06 The risk-free rates are different because they were measured in different years. Calculate the expected (or required) return for each stock, using the Capital Asset Pricing Model (CAPM). Part 1 B Attempt 1/5 for 10 pts. What is the expected return for stock 1? 3+ decimals Submit Part 2...
Problem 19 Intro Assume that the CAPM holds. One stock has an expected return of 10% and a beta of 0.3. Another stock has an expected return of 14% and a beta of 1.5. IB Attempt 4/10 for 5 pts. Part 1 What is the expected return on the market? 3+ decimals Submit
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