Given the following information, what must be the risk-free rate, if markets are properly priced? Company...
Given the following information, what must be the risk-free rate, if markets are properly priced? Company C's expected return is 19.75%, the market's expected return is 10.55%, and company C's beta is 1.97?
Homework Answers
expected return=risk free rate+beta*(market rate-risk free rate)
19.75=risk free rate+1.97*(10.55-risk free rate)
19.75=risk free rate+20.7835-1.97risk free rate
risk free rate=(20.7835-19.75)/(1.97-1)
=1.07(Approx).
Add Answer to:
Given the following information, what must be the risk-free
rate, if markets are properly priced? Company...
Which of the following stocks is correctly priced if the risk-free rate of return is 3.2...
Which of the following stocks is correctly priced if the risk-free rate of return is 3.2 percent and the market rate of return is 11.76 percent? More than one may be correct Stock Beta Expected Return A 0.87 11.03% B 1.09 12.50% C 1.18 13.21% D 1.34 15.02% E 1.62 17.07%
if the risk-free rate of interest is 1.89%, the expected return of Shippo is 16.49% and...
if the risk-free rate of interest is 1.89%, the expected return of Shippo is 16.49% and has a beta of 1.81. if Shippo is properly priced what is the MRP? 8.99 7.41 8.07 7.82
Which one of the following stocks is correctly priced if the risk-free rate of return is...
Which one of the following stocks is correctly priced if the risk-free rate of return is 3.9 percent and the market risk premium is 8.4 percent? Stock Beta .77 1.55 1.36 1.33 .95 Expected Return 7.86% 12.65 17.33 11.93 11.88 Ο Stock E Ο Stock A Ο Stock D Ο Stock B Ο Stock C
Given the following information about Stock XYZ what is the expected return for Stock XYZ given the CAPM? The risk-free...
Given the following information about Stock XYZ what is the expected return for Stock XYZ given the CAPM? The risk-free rate is 1.1%, the market risk premium is 10.8%, and the Beta of Stock XYZ is 1.2.
The risk free rate is 2% and the market's risk premium is 6%. If the CAPM...
The risk free rate is 2% and the market's risk premium is 6%. If the CAPM holds, what is the beta of a security with a 12% expected return? 1.67 1.5 2 2.5
4. Which one of the following stocks is correctly priced if the risk-free rate of return...
4. Which one of the following stocks is correctly priced if the risk-free rate of return is 3.7 percent and the market risk premium is 8.2 percent? Stock Beta Expected Return A 0.73 7.84% B 1.53 17.50% C 1.34 11.28% D 1.29 11.87% E 0.95 11.49% a. Stock D b. Stock B c. Stock C . d. Stock E e. Stock A
You are given the following set of market conditions: the risk-free rate = 5%, expected rate...
You are given the following set of market conditions: the risk-free rate = 5%, expected rate of return of the market portfolio = 12%. Compute the expected return for the following risky securities: APPL: Beta = 1.25 BA: Beta = 1.10 C: Beta = 0.75 Draw a graph of the Security Marker Line (SML) based on the information given in part 1 and plot the three securities.
9 27) Jerilu Markets has a beta of 1.09. The risk-free rate of return is 3.18...
9 27) Jerilu Markets has a beta of 1.09. The risk-free rate of return is 3.18 percent and the market rate of return is 11.27 percent. What is the risk premium on this stock? A) 3.47 percent B) 7.03 percent C) 8.82 percent D) 8.99 percent E) 7.80 percent Answer: C I understand the answer is: Risk premium = 1.09(.1127 − .0318) Risk premium = .0882, or 8.82% However, I dont understand why is beta involved in this equation because...
Jerilu Markets has a beta of 1.09. The risk-free rate of return is 2.75 percent and...
Jerilu Markets has a beta of 1.09. The risk-free rate of return is 2.75 percent and the market rate of return is 9.80 percent. What is the risk premium on this stock?
Security X has a rate of return of 13% and a beta of 1.15. The risk-free...
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%....
Which one of the following stocks is correctly priced if the risk-free rate of return is 3.9 percent and the market risk premium is 8.4 percent? Stock Beta .77 1.55 1.36 1.33 .95 Expected Return 7.86% 12.65 17.33 11.93 11.88 Ο Stock E Ο Stock A Ο Stock D Ο Stock B Ο Stock C
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%....
Most questions answered within 3 hours.
-
Identification of unknown Bacteria by sequencing
rDNA
Having a little trouble understanding the PCR process. This...
asked 28 minutes ago -
please answer the four of the questions
4. how are warehouse distribution centers, and cross-
docking...
asked 1 hour ago -
X Company currently makes a part and is considering buying it
from a company that has...
asked 2 hours ago -
The height of a helicopter above the ground is given by h =
2.90t3, where h...
asked 2 hours ago -
Consider the natural join of the relation R(A,B) and S(A,C) on
attribute A. Neither relations have...
asked 2 hours ago -
You are a network planner tasked with developing an IP structure
for the following networks. The...
asked 3 hours ago -
Christmas Express makes wreaths in batch sizes of 30. The
cutting & assembly process takes 4...
asked 3 hours ago -
Suppose a brewery has a filling machine that fills 12-ounce
bottles of beer. It is known...
asked 5 hours ago -
For this problem, carry at least four digits after the decimal
in your calculations. Answers may...
asked 8 hours ago -
Ask a user for three positive integer numbers. Use an input
validation loop to make sure...
asked 8 hours ago -
The most primitive form of data from data analysis perspective
is a. nominal scale b. ordinal...
asked 8 hours ago -
The number of vacancies in some hypothetical metal increases by
a factor of 5 when the...
asked 8 hours ago