Question

Suppose that the Treasury bill rate is 5% and the expected return on the market stays at 9%. Use the following information.

Stock	Beta (β)
Caterpillar	1.73
Dow Chemical	1.52
Ford	1.33
Microsoft	0.91
Apple	0.94
Johnson & Johnson	0.62
Walmart	0.58
Campbell Soup	0.28
Consolidated Edison	0.20
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 highest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Highest expected return             %

c. Find the lowest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number.)

Lowest expected return             %

Answer 1

5+0.62(9-5) 2(니 7-48 % 5 9-5) (rThe expected sector 아