Required return=risk free rate+beta*(market rate-risk free rate)
=2.4+1.2*(12.3-2.4)
which is equal to
=14.28%
According to the capital asset pricing (CAPM) model, what return should you require for a security...
According to the capital asset pricing (CAPM) model, what return should you require for a security with a beta of 1.8, if the risk-free rate is 3.0% and the market return is 11.4%? (Enter your answer as a percentage. For example, enter 8.43% instead of 0.0843.) Your Answer: Answer units
Question 8 (1 point) According to the capital asset pricing (CAPM) model, what return should you require for a security with a beta of 1.4, if the risk-free rate is 3.4% and the market return is 12.5%? (Enter your answer as a percentage. For example, enter 8.43% instead of 0.0843.) Your Answer: Answer units
For AT&T Inc. 2018. Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on THE COMPANY stock. Expected Rate of Return = Risk-Free Rate + Beta(Market Return – Risk Free Rate) Use 7.5% for an average expected market rate of return Use 3% as an average risk-free rate (10 year composite rate of T-bill) Find the beta of your company’s stock with other financial data on Yahoo Finance or MarketWatch....
Question 2: Using the CAPM (capital asset pricing model) and SML (security market line), what is the expected rate of return for an investment with a Beta of 1.8, a risk free rate of return of 4%, and a market rate of return of 10%.
Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the requied returm, (Click on the icon located on the top-ight comer of the data table below in order to copy its contents into a spreadsheet.) Risk-free rate, RF 8% Market return, m 16% Beta, b The required return for the asset is (Round to two decimal places) Enter your answer in the answer box 2 12/2/2018
Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the required return. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Risk-free rate, RF 10% Market return, om 15% Beta, b 0.5 The required return for the asset is % (Round to two decimal places.)
Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the required return. (Click on the icon located on the top-r spreadsheet) Risk free Market rate, R. Beta, 2% 7% 0.9 O retur, The required retum for the set is % (Round to two decimal places)
LG6 5-24 Manipulating CAPM Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems. a. Find the required return for an asset with a beta of.90 when the risk-free rate and market return are 8% and 12%, respectively. 58 PART 2 Important Financial Concepts b. Find the risk-free rate for a firm with a required return of 15% and a beta of 1.25 when the market return is 14%. c. Find the...
Which of the following are assumptions of the Capital Asset Pricing Model (CAPM)? Check all that apply. O Asset quantities are given and fixed. There are no transaction costs. Taxes are accounted for. All investors focus on a single holding period. O Consider the equation for the Capital Asset Pricing Model (CAPM): Cov(ri, rm) ři = rre + Cím – PRF) x In this equation, the term Cov(ri, rm) / om represents the Suppose that the market's average excess return...
Manipulating CAPM Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems. a. Find the required return for an asset with a beta of 1.18 when the risk-free rate and market return are 5% and 8%, respectively. b. Find the risk-free rate for a firm with a required return of 13.117% and a beta of 1.51 when the market return is 12%. c. Find the market return for an asset with a...