Using CAPM calculate the expected return for Share A, assuming a beta factor of 1.6, a market expected return of 12% and a market risk premium of 5%.
Using CAPM calculate the expected return for Share A, assuming a beta factor of 1.6, a...
Using CAPM calculate the expected return for Share A, assuming a beta factor of 1.6, a market expected return of 12% and a market risk premium of 5%.
Problem 3: Calculating a portfolio's beta and CAPM-based expected rate of return Ashley is curious to know what her portfolio's CAPM-based expected rate of return should be. After doing some research, she determines that the current market values and betas of each of her 5 stock are as listed below. She is informed by her financial advisor that the risk-free rate is 3% and the market risk premium is 8%. Calculate the expected rate of return on Ashley's portfolio. Stock...
CAPM: The risk-free rate is 2%, Beta=1.6 and return to the market is 5% Calculate excess return to the market Calculate the required return on equity What does a lower number mean vs a higher return on equity? No spreadsheet, worked out
According to the CAPM, what must be the beta of a portfolio with expected return 0.25, if the risk-free rate is 0.07 and the market risk premium is 0.12? Assume that the stock is fairly priced according to the CAPM.
#11 and #13 (CAPM) The stock is appropriately priced and its expected annual return is 10.4%. The annual return on the 30-year Treasury is 3.5%, and the expected annual return on S&P 500 is 13%. What is the stock's beta coefficient? 12. (CAPM) The stock is appropriately priced and its expected annual return is 14.1%. The annual return on the 30-year Treasury is 2.5%, and the expected annual return on S&P 500 is 12%. What is the stock's beta coefficient?...
16. Using CAPM A stock has an expected return of 10.2 percent and a beta of .91, and the expected return on the market is 10.8 percent. What must the risk-free rate be?
Problem 11-12 Using CAPM A stock has a beta of 1.10, the expected return on the market is 12 percent, and the risk-free rate is 3.6 percent. What must the expected return on this stock be? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return %
Cost of common stock equity-CAPM Netflix common stock has a beta, b, of 1.6. The risk-free rate is 5%, and the market return is 9%. a. Determine the risk premium on Netflix common stock. b. Determine the required return that Netflix common stock should provide. c. Determine Netflix's cost of common stock equity using the CAPM.
Consider the single factor APT. Portfolio A has a beta of 1.6 and an expected return of 28%. Portfolio B has a beta of 0.8 and an expected return of 21%. The risk-free rate of return is 5%. If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio__ and a long position in portfolio__.
Stock A has a beta of 0.4, and investors expect it to return 10%. Stock B has a beta of 1.6, and investors expect it to return 16%. Use the CAPM to calculate the market risk premium and the expected rate of return on the market. (Enter your answers as a whole percent.) Market risk premium % Expected market rate of return %