Question 3:
You know that an investment with a beta of 1 generates an expected return of 9%, you also know that another investment, which has a beta of 0, generates a return of 2%. What return can you expect on an investment with a beta of 0.75?
Question 3: You know that an investment with a beta of 1 generates an expected return...
Investment A has a beta of 1.7 and an expected rate of return of 15.7%. Investment B has a beta of 0.8 and an expected rate of return of 10.2%. What is the equity premium (market risk premium)?
Question 1 (14 marks) Assume the risk-free rate is 3% and the expected rate of return on the market is 10%. a. AXB stock is now selling for $45 per share. It will pay a dividend of $2 per share at the end of the year. Its beta is 1.3. What do you expect the stock to sell for at the end of the year? (4 marks) b. Peter is buying a firm with an expected perpetual cash flow of...
nvestment A has a beta of 1.3 and an expected rate of return of 17.2%. Investment B has a beta of 0.8 and an expected rate of return of 11.9%. What is the equity premium (market risk premium)?
Suppose that the S&P 500, with a beta of 1.0, has an expected return of 16% and T-bills provide a risk-free return of 7%. a. What would be the expected return and beta of portfolios constructed from these two assets with weights in the S&P 500 of (i) 0; (ii) 0.25; (iii) 0.50; (iv) 0.75; (v) 1.0? (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Enter the value of Expected return...
Question 19 (1 point) Calculate the expected return on a stock with a beta of 1.19. The risk-free rate of return is 2% and the market portfolio has an expected return of 9%. (Enter your answer as a decimal rounded to 4 decimal places, not a percentage. For example, enter .0153 instead of 1.53%) Your Answer Answer
:p QUESTION 32 Calculate the expected return of a stock with a 1.6 beta if the expected return on the market portfolio is 13 % and the risk free rate is 5 %. TT TT Paragraph: Arial 3 (12pt) ·-·-·T·ノ. fx " Mashups , ㅖ “ @ ↓圈ㄧ 镼 t 1圏-ellj'TEHEll metss: Path: p QUESTION 33 Risky asset A has an expected return of 15% and the nsk-free asset has a return of 7%. How can you construct a portfolio...
Expected return of a portfolio using beta. The beta of four stocks—G, H, I, and J—are 0.44, 0.75, 1.18, and 1.58, respectively and the beta of portfolio 1 is 0.99, the beta of portfolio 2 is 0.83, and the beta of portfolio 3 is 1.14. What are the expected returns of each of the four individual assets and the three portfolios if the current SML is plotted with an intercept of 3.0% (risk-free rate) and a market premium of 10.0%...
This Question: 2 pts Sterling incorporated has a Beta of a 1.0. If the expected return on the market is 12%, what is the expected return on Sterling Inc. stock? O A. 12% OB. 10% OC. 9% OD. 24%
8-3a Expected Portfolio Returns Calculate the expected return of the portfolio based on the following individual investments and its percentage of the total portfolio. Expected Return Weight -5.4% 10% 3% 23% 3.9% 20% 10% 0% 50% 20% B. 8-3b Portfolio Risk Based on the expected portfolio retums below, te expected return for the portfolio is 5.8% (you can check this). Calculate the standard deviation of the following portfolio: Expected Return Probability 10% 1% 8-3e Beta-Part 1 Returns on technology stocks...
How is question #9 worked? A stock has a beta of 1.22, the expected return on the market is 12 percent, and the risk-free rate is 4 percent. What must the expected return on this stock be? 13.76% 9.