Required rate of return
= Risk free rate+ Beta(Market rate of return - Risk free rate of return )
= 8% + 1.3(16%-8%) = 8%+1.3*8%
= 8% + 10.4% = 18.4%
The required rate of return for the asset is 18.4%.
Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital...
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-right corner of the data table below in order to copy its contents into a spreadsheet.) 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)
Integrativelong dash—?Risk, ?return, and CAPM???Wolff Enterprises must consider one investment project using the capital asset pricing model? (CAPM). Relevant information is presented in the following table.???(Click on the icon located on the? top-right corner of the data table below in order to copy its contents into a? spreadsheet.) Item Rate of return ?Beta, b ?Risk-free asset 6?% 0.00 Market portfolio 11?% 1.00 Project 0.64 a.??Calculate the required rate of return for the? project, given its level of nondiversifiable risk. b.??Calculate...
(Capital asset pricing model) Levine Manufacturing Inc. in considering several investments in the popup window In The rate on Tremur bite currently 6.0 percent, and the expected return for the market is 118 percent. What should be the required rate of rotum for each Investment using the CAPMYO a. Using the CAPM the required rate of return for security AI IX (Round to two decimal places) b. Using the CAPM, the required rate of return for security Bit Round to...
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...
Problem 6-15 (similar to) EQuestion Help (Capital asset pricing model) Using the CAPM, estimate the appropriate required rate of return for the three stocks listed here, given that the risk-free rate is 8 percent and the expected return for the market is 16 percent STOCK ВЕТА A 0.65 В 0.96 C 1.41 (Click on the icon located on the top-right corner of the data table above in order to ito oontonto intoa anroadabant
For the asset shown in the following table, use the capital asset pricing model to find the required return. Risk-free rate, Upper R Subscript Upper FRF Market return, r Subscript mrm Beta, b Copy to Clipboard + Open in Excel + 7% 13% 1.3 The required return for the asset is nothing ___% (Round to two decimal places.)
LG6 5-22 Capital asset pricing model (CAPM) For each of the cases shown in the follow- ing table, use the capital asset pricing model to find the required return. Case Risk-free rate, Rp Market return, k. Beta, b 8% 13 1.30 .90 -.20 1.00 .60 D 10
Which of the following are assumptions of the Capital Asset Pricing Model (CAPM)? Check all that apply.Investors assume that their investment activities won't affect the price of a stock.There are no taxes.Assets won't be short sold.Asset quantities aren't given.Consider the equation for the Capital Asset Pricing Model (CAPM):$$ \hat{r}_{1}=r_{R F}+\left(\hat{r}_{M}-r_{R F}\right) \times \frac{\operatorname{Cov}\left(r_{i}, r_{M}\right)}{\sigma_{M}^{2}} $$In this equation, the term \(r_{R F}\) represents therate of return on a risk-free bondSuppose that the market's average excess return on stocks is 6.00 %...