The beta of a Risk-free assest equals zero True or False ?
The beta of a Risk-free assest equals zero
True or False ?
Homework Answers
True
The beta is the measure of risk which shows how the share will move according to the market and in case of risk free asset, it doesn't show any movement, therefore, the beta is zero .
If you know the risk-free rate, the market risk-premium, and the beta of a stock, then...
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
Which is true for a firm's cost of equity: Select one a. It equals risk-free rate...
Which is true for a firm's cost of equity: Select one a. It equals risk-free rate plus market risk premium b. It remains unaffected by firm risk c. When based on dividend growth, firm risks are ignored d. It increases as unsystematic firm risk increases
hi, could you please simply answer these as true or false 8) A Zero-coupon bond pays...
hi,
could you please simply answer these as true or false
8) A Zero-coupon bond pays no coupon for the 1st half of the bond life. _ 9) Flotation Costs decrease the cost of capital for a firm. 10) The rate of return for Preferred Stock is reduced by the tax rate of the firm. 11) Preferred Stock has characteristics of both bonds and common stock. 12) Cumulative feature of Preferred Stock generally allows for voting provisions if a dividend...
True or false: density multiplied by volume equals mass. True or false: moles multiplied by molecular...
True or false: density multiplied by volume equals mass. True or false: moles multiplied by molecular weight equals grams. True or false: moles divided by molecular weight equals grams.
hi, could you please simply answer these as true or false 8) A Zero-coupon bond pays no coupon for the 1st half of t...
hi,
could you please simply answer these as true or false
8) A Zero-coupon bond pays no coupon for the 1st half of the bond life. _ 9) Flotation Costs decrease the cost of capital for a firm. 10) The rate of return for Preferred Stock is reduced by the tax rate of the firm. 11) Preferred Stock has characteristics of both bonds and common stock. 12) Cumulative feature of Preferred Stock generally allows for voting provisions if a dividend...
TOISRULIUSS. Expected Return = Risk free Rate + beta (expected market return - risk free rate)...
TOISRULIUSS. Expected Return = Risk free Rate + beta (expected market return - risk free rate) .04 +0.80.09 - .04) = .08 = 8.0% 3. Suppose the MiniCD Corporation's common stock has a return of 12%. Assume the risk- free rate is 4%, the expected market return is 9%, and no unsystematic influence affected Mini's return. The beta for MiniCD is:
Elba Eateries' stock has a beta of 0.70. Assume that the risk-free rate, rRF, is 5.5%...
Elba Eateries' stock has a beta of 0.70. Assume that the risk-free rate, rRF, is 5.5% and the market risk premium, (rM – rRF), equals 4%. Compute the required rate of return for Elba Eateries. Respond in percentage form without the percent sign and round to the second decimal place
True or false and why? 7. Suppose stock A’a beta is 1.3 and stock B’s beta...
True or false and why? 7. Suppose stock A’a beta is 1.3 and stock B’s beta is 0.7. Then in capital market equilibrium (e.g. the required returns equals expected return), the expected return of Stock A should be smaller than that on B. 8. The weighted average of the expected returns on the stocks in the portfolio is an important statistical information and it is also called realized return.
True/False questions A particular stock is characterized by a negative beta, but a large standard deviation...
True/False questions A particular stock is characterized by a negative beta, but a large standard deviation two times that of a broad-based market index. Due to this stock's substantial total risk, we expect its return to exceed that of a risk-free asset. The fact that over 1/4 of all professionally managed stock mutual funds are able to outperform the S&P 500 in a typical year, is evidence against the semi-strong form of market efficiency.
A firm is considering a project that is virtually risk-free. The company has a beta of...
A firm is considering a project that is virtually risk-free. The company has a beta of 1.3 and a debt-equity ratio of .4. The appropriate discount rate to use in analyzing this project is: Select one: a. Zero. b. The firm’s latest WACC. c. The cost of equity capital. d. The U.S. Treasury bill rate. e. An adjusted WACC based on a beta of 1.0.
Which is true for a firm's cost of equity: Select one a. It equals risk-free rate plus market risk premium b. It remains unaffected by firm risk c. When based on dividend growth, firm risks are ignored d. It increases as unsystematic firm risk increases
hi,
could you please simply answer these as true or false
8) A Zero-coupon bond pays no coupon for the 1st half of the bond life. _ 9) Flotation Costs decrease the cost of capital for a firm. 10) The rate of return for Preferred Stock is reduced by the tax rate of the firm. 11) Preferred Stock has characteristics of both bonds and common stock. 12) Cumulative feature of Preferred Stock generally allows for voting provisions if a dividend...
hi,
could you please simply answer these as true or false
8) A Zero-coupon bond pays no coupon for the 1st half of the bond life. _ 9) Flotation Costs decrease the cost of capital for a firm. 10) The rate of return for Preferred Stock is reduced by the tax rate of the firm. 11) Preferred Stock has characteristics of both bonds and common stock. 12) Cumulative feature of Preferred Stock generally allows for voting provisions if a dividend...
TOISRULIUSS. Expected Return = Risk free Rate + beta (expected market return - risk free rate) .04 +0.80.09 - .04) = .08 = 8.0% 3. Suppose the MiniCD Corporation's common stock has a return of 12%. Assume the risk- free rate is 4%, the expected market return is 9%, and no unsystematic influence affected Mini's return. The beta for MiniCD is:
Most questions answered within 3 hours.
-
Fiscal policy is the deliberate manipulation of taxes and
government spending to alter GDP, employment, inflation...
asked 29 minutes ago -
evaluating an expression using only one digit and + and - as
operators ....3+5-1+7-5+8
-----------------------
stack...
asked 30 minutes ago -
Two concentric current loops lie in the same plane. The smaller
loop has a radius of...
asked 58 minutes ago -
1)Which of the following is an
important difference between qualified and nonqualified retirement
plans?
a. Qualified...
asked 1 hour ago -
What's the streaming business's problem on the
horizon?
asked 2 hours ago -
I need help with writing the conclusion for this online lab
report
Abstract
By testing the...
asked 2 hours ago -
For the reaction 1N2+3H2-----> 2NH3, would the reaction rate
trend be: delta[NH3]/ delta t = -2...
asked 2 hours ago -
Within your current/past organization, identify a problem/issue
and format a design to address same. You may...
asked 2 hours ago -
A sock stuck to the side of a clothes-dryer barrel has a
centripetal acceleration of 24...
asked 3 hours ago -
A perfect gas undergoes an isentropic process such that its
volume doubles. If the ratio of...
asked 4 hours ago -
list the elements in groups 3A to 6A in the same order as in the
periodic...
asked 4 hours ago -
Estimating effect size. Peng and Chen (2014)
evaluated effect size estimates for various tests. In their...
asked 4 hours ago