Homework Answers
Answer :
The risk free rate is 13 weeks that equals to " 1.25 "
In general risk free rate is return on investment with zero amount of risk but in practical world no securities gives us zero risky in the market but we can expect less risky example like government securities.
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Question 5 1 pts The rate of return on the 4 week treasury is .5%, the...
The rate of return on the 4 week treasury is .25%, the rate of return on...
The rate of return on the 4 week treasury is .25%, the rate of return on a 9 week treasury is .75%, and the rate of return on a 13 week treasury is 1%. What is the risk free rate? Answer with a number and not a percent sign. For example if you think the answer is 2%, enter" 2
1.) The rate of return on the 4 week treasury is .25%, the rate of return...
1.) The rate of return on the 4 week treasury is .25%, the rate of return on a 9 week treasury is .75%, and the rate of return on a 13 week treasury is 1%. What is the risk free rate? 2.) The rate of return on the 4 week treasury is .5%, the rate of return on a 9 week treasury is .75%, and the rate of return on a 13 week treasury is 1.25%. What is the risk...
D Question 12 1 pts Consider a Treasury bill with a rate of return of 5%...
D Question 12 1 pts Consider a Treasury bill with a rate of return of 5% and the following stocks: Stock A: El. 15:09-0400, Stock B: E(r)-13; 02-0225, Stock C:E()-10; 02-0169. The investor must develop a complete portfolio by combining the risk-free asset with one of the stocks. The stock the investor should choose to achieve the best CAL would be None of the above. Stock B O Stock Stock • Previous Next
Incorrect Question 2 0/1 pts From your text, Chapter 20, question 4: If the risk free...
Incorrect Question 2 0/1 pts From your text, Chapter 20, question 4: If the risk free rate equals 7 percent and and the risk premium for Thistle Corp. is 5 percent, what is the opportunity cost of capital for Thistle? For this question, enter a numeric value. Enter only a number, as full percentages. Do not include any alphabetic or special characters, such as "%" For example, if your answer is "3.25%" enter exactly as 3.25 and not as 3.25%...
Question 12 (5 points) 12. Compute the standard deviation of the expected return given these three...
Question 12 (5 points) 12. Compute the standard deviation of the expected return given these three economic states, their likelihoods, and the potential returns: Economic status Probability Return Fast growth 0.1 50% Slow growth 0.6 8% Recession -10 % 0.3 (just type the number of standard deviation (SD) without % and round up to second decimal places. For example, if your answer is 13.6789, enter 13.68) 6.2 AV Question 13 (5 points) panes 13. A company has a beta of...
Item4 1points Return to question Item 4 Item 4 1 points Treasury bills are currently paying...
Item4 1points Return to question Item 4 Item 4 1 points Treasury bills are currently paying 8 percent and the inflation rate is 3 percent. a. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the exact real rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The risk-free rate is 6% and the expected rate of return on the market portfolio is...
The risk-free rate is 6% and the expected rate of return on the market portfolio is 13%.
a. Calculate the required rate of return on a security with a beta of 1.25. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. If the security is expected to return 16%, is it overpriced or underpriced?
The Treasury bill rate is 4%, and the expected return on the market portfolio is 11%....
The Treasury bill rate is 4%, and the expected return on the market portfolio is 11%. According to the capital asset pricing model: a. What is the risk premium on the market? b. What is the required return on an investment with a beta of 1.6? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) c. If an investment with a beta of 0.8 offers an expected return of 8.6%, does it have...
Suppose that the Treasury bill rate is 4% and the expected return on the market stays...
Suppose that the Treasury bill rate is 4% and the expected return on the market stays at 9%. Use the following information. Stock Beta (β) Caterpillar 1.68 Dow Chemical 1.63 Ford 1.42 Microsoft 0.96 Apple 0.93 Johnson & Johnson 0.55 Walmart 0.47 Campbell Soup 0.37 Consolidated Edison 0.19 Newmont 0.00 a. Calculate the expected return from Johnson & Johnson. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expected return % b. Find...
The Treasury bill rate is 4%, and the expected return on the market portfolio is 11%....
The Treasury bill rate is 4%, and the expected return on the market portfolio is 11%. According to the capital asset pricing model: a. What is the risk premium on the market? b. What is the required return on an investment with a beta of 1.6? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) c. If an investment with a beta of 0.8 offers an expected return of 8.6%, does it have...
The rate of return on the 4 week treasury is .25%, the rate of return on a 9 week treasury is .75%, and the rate of return on a 13 week treasury is 1%. What is the risk free rate? Answer with a number and not a percent sign. For example if you think the answer is 2%, enter" 2
D Question 12 1 pts Consider a Treasury bill with a rate of return of 5% and the following stocks: Stock A: El. 15:09-0400, Stock B: E(r)-13; 02-0225, Stock C:E()-10; 02-0169. The investor must develop a complete portfolio by combining the risk-free asset with one of the stocks. The stock the investor should choose to achieve the best CAL would be None of the above. Stock B O Stock Stock • Previous Next
Incorrect Question 2 0/1 pts From your text, Chapter 20, question 4: If the risk free rate equals 7 percent and and the risk premium for Thistle Corp. is 5 percent, what is the opportunity cost of capital for Thistle? For this question, enter a numeric value. Enter only a number, as full percentages. Do not include any alphabetic or special characters, such as "%" For example, if your answer is "3.25%" enter exactly as 3.25 and not as 3.25%...
Question 12 (5 points) 12. Compute the standard deviation of the expected return given these three economic states, their likelihoods, and the potential returns: Economic status Probability Return Fast growth 0.1 50% Slow growth 0.6 8% Recession -10 % 0.3 (just type the number of standard deviation (SD) without % and round up to second decimal places. For example, if your answer is 13.6789, enter 13.68) 6.2 AV Question 13 (5 points) panes 13. A company has a beta of...
The risk-free rate is 6% and the expected rate of return on the market portfolio is 13%.
a. Calculate the required rate of return on a security with a beta of 1.25. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
b. If the security is expected to return 16%, is it overpriced or underpriced?
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