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Multiple parts, please review each! Quick MC questions, I believe they are all correct but would just like to make sure I am doing them correctly.

You are considering buying shares of Ember Incorporated to add to your portfolio. Your broker tells you that Embers beta is

You have estimated the beta and return for a stock and it currently plots below the security market line (SML). Per the CAPM,Your portfolio consists of the following: Stock Shares held Price per share Beta McDonalds Corporation 100 $167 0.49 Tiffany

True or False. All of your wealth is invested in an S&P500 index fund (i.e., the funds performance mimics the performance of

Investors expect deflation to occur (i.e., you expect a negative rate of inflation also called deflation). Holding all other

The rate on U.S. Treasury bills is currently yielding 0.14%. The estimated return on the Standard and Poors 500 is 10.50%. Y

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Answer #1

Solution:-

To Calculate Market Risk Premium-

Market Risk Premium = Market Return - Risk Free Rate

Market Risk Premium = 10% - 2.50%

Market Risk Premium = 7.50%

The Correct Answer is point B i.e. 7.50%

As per HOMEWORKLIB POLICY we need to answer only one question at once so please ask other as separate one.

If you have any query related to question then feel free to ask me in a comment.Thanks.

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