The stock of Target Corporation has a return of 29.33. The market risk premium is 11.44 percent and the risk-free rate is 8.74 percent. What is the beta on this stock? Use the CAPM Equation
Expected rate=risk free rate+Beta*market risk premium
29.33=8.74+Beta*11.44
Beta=(29.33-8.74)/11.44
=1.8(Approx).
The stock of Target Corporation has a return of 29.33. The market risk premium is 11.44...
The stock of Target Corporation has a beta of 1.17. The market risk premium is 7.97 percent and the risk-free rate is 3.14 percent. What is the required rate of return on this stock? Use the CAPM Equation Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.
Pt 1. If a stock has a market beta greater than 1, the expected return will be less than the expected return of market portfolio. Pt. 2 The stock of Target Corporation has a return of 36.43. The market risk premium is 16.94 percent and the risk-free rate is 8.04 percent. What is the beta on this stock? Use the CAPM Equation
The risk-free rate is 4.5%, the market risk premium = ( E(Rm) - Rf) is 10.1%, and the stock’s beta is 1.3. What is the required rate of return on the stock, E(Ri)? Use the CAPM equation.
Asset A has a CAPM beta of 1.5. The covariance between asset A and asset B is 0.13. If the risk-free rate is 0.05, the expected market risk premium is 0.07, and the market risk premium has a standard deviation of 25%, then what is asset B's expected return under the CAPM? Asset A has a CAPM beta of 1.5. The covariance between asset A and asset B is 0.13. If the risk-free rate is 0.05, the expected market risk...
The risk-free rate is 2.5 percent and the market risk premium is 5 percent. Assume that required returns are based on the CAPM. Your $1 million portfolio consists of $ 208 ,000 invested in a stock that has a beta of 1.0 and the remainder invested in a stock that has a beta of 1.2 . What is the required return on this portfolio?
5. 14. Using CAPM. A stock has an expected return of 11.4 percent, the risk-free rate is 3.7 percent, and the market risk premium is 6.8 percent. What must the beta of this stock be?
14. Using CAPM (L01, 4) A stock has an expected return of 10.2 percent, the risk-free rate is 4.1 percent, and the market risk premium is 7.2 percent. What must the beta of this stock be?
REQUIRED RATE OF RETURN (Percent) 20.0 Return on HC's Stock . / / 1.5 2.0 RISK (Beta) / / / / / CAPM Elements Risk-free rate (RF) Market risk premium (RPM) Happy Corp. stock's beta Required rate of return on Happy Corp. stock nalyst believes that inflation ir at Value CAPM Elements Risk-free rate (TRF) Market risk premium (RPM) Happy Corp. stock's beta Required rate of return on Happy Corp. stock An analyst believes that inflation is going to increase...
If you know the risk-free rate, the market risk-premium, and the beta of a stock, then using the Capital Asset Pricing Model (CAPM) you will be able to calculate the expected rate of return for the stock. True False
According to the CAPM, what is the expected return on a security given a market risk premium of 8%, a stock beta of 1.23, and a risk free interest rate of 2%?