Expected return=risk free rate+beta*(market rate-risk free rate)
=2.7+1.3*(15.8-2.7)
which is equal to
=19.73%
Question 2 1 pts The S&P500 has an expected return of 15.8%. The riskless rate is...
Question 12 1 pts Assume a risk-free rate of 2.59% and an expected return of the market of 8.62%. Assume further that we have an asset with a beta of 2.62. According the CAPM, what should the expected return of this asset be? (give the answer as a percentage)
Help Question 1 5 pts Centex Energy has a beta of 1.45. Assume that risk-free rate and the expected rate of return on the market are 2% and 12% respectively. According to the capital asset pricing model (CAPM), what is the expected rate of return for this company's stock? Your answer should be between 11.45 and 18.55, rounded to 2 decimal places, with no special characters. Question 2 5 pts
A security has a beta of 0.8; the riskless rate is 4%, and the expected market risk premium is 6% per year. The dividend for this security next year is anticipated to be $2.00 per share; the dividend is expected to grow at 3% in perpetuity. The stock is currently trading at $38 a share. If the CAPM is true, is the security in equilibrium?
A stock has an expected return of 15.8 percent, the risk-free rate is 3.6 percent, and the market risk premium is 9.9 percent. What must the beta of this stock be? (Do not round intermediate calculations. Round your answer to 2 decimal places.) & Answer is complete but not entirely correct. Beta 1.27 X
Question 6 (1 point) A stock has a beta of 2.4, the market expected return is 8% and the riskfree rate is 2%. What is the expected rate of return according to CAPM? Express your answer as a percentage, for example 3.18% should be entered as 3.18 without the percentage sign. Your Answer: Answer Question 7 (1 point) Suppose the covariance between the returns of the stock GHI and the returns to the market is 0.00064 and the standard deviation...
Stock A has a beta of 1.20 and is farily priced. The riskless rate of return (US Treasury Bills) is 3.2%. The market risk premium is 5.4%. Construct a $100,000 portfolio of stock A and Treasury Bills that will have an expected return of 5.144%. (Rounded to the nearest dollar.)
Consider the CAPM. The risk-free rate is 5%, and the expected return on the market is 14%. What is the expected return on a stock with a beta of 1.2? Multiple Choice 22% 17.8% 12.5% 15.8%
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