1. A stock with a beta of 1.32 is expected to return 14.57% next year. If...
1. A stock with a beta of 1.32 is expected to return 14.57% next year. If the expected market return is 11.50%, what is the expected risk free rate?
A. 1.90%
B. 3.07%
C. .61%
D. 8.71%
2. A bond's nominal interest rate is 8.80%. If the expected inflation rate is 2.10% and the realized (actual) inflation rate is 2.55%. What is the bond's real rate of return?
A. 8.35%
B. 3.70%
C. 6.25%
D. 5.80%
Homework Answers
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1. A stock with a beta of 1.32 is expected to
return 14.57% next year. If...
2. A bond's nominal interest rate is 8.80%. If the expected inflation rate is 2.10% and...
2. A bond's nominal interest rate is 8.80%. If the expected inflation rate is 2.10% and the realized (actual) inflation rate is 2.55%. What is the bond's real rate of return? A. 8.35% B. 3.70% C. 6.25% D. 5.80%
A stock with a beta of 1.32 is expected to return 14.57% next year. If the...
A stock with a beta of 1.32 is expected to return 14.57% next year. If the expected market return is 11.50%, what is the expected risk free rate?
A stock has a beta of 1.32 and an expected return of 13 percent. A risk-free...
A stock has a beta of 1.32 and an expected return of 13 percent. A risk-free asset currently earns 4.4 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If a portfolio of the two assets has a beta of.92, what are the portfolio weights? (Do not round intermediate calculations and...
Question 22 Stock Y has an expected return of 14% and beta of 1.80. Stock Z...
Question 22 Stock Y has an expected return of 14% and beta of 1.80. Stock Z has an expected return of 11.50% and beta of 1.10. If the risk-free rate is 3.5% and the market risk premium is 6.5%, which security is overvalued? Stock Y, because it plots below the SML Stock Z, because it plots below the SML Stock Z, because it plots above the SML Stock Y, because it plots above the SML No answer text provided. Flag...
Question 6 (1 point) A stock has a beta of 2.4, the market expected return is...
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...
1. If nominal GDP in 2016 equals to $4,500 and real GDP for the year is...
1. If nominal GDP in 2016 equals to $4,500 and real GDP for the year is $4,000 (in 2009 dollars), The GDP deflator in 2016 is and the rate of inflation since 2009 is a. 112.5, 12.5 percent. b. 88.9,-11.1 percent 12.5, insufficient information for the calculation of the rate of inflation. 11.1, insufficient information for the calculation of the rate of inflation. c. d. 2. Actual GDP is run. a. above, above b. below; below c. below; above d....
31. You own a stock that has an expected return of 15.72 percent and a beta...
31. You own a stock that has an expected return of 15.72 percent and a beta of 1.33. The U.S. Treasury bill is yielding 3.82 percent and the inflation rate is 2.95 percent. What is the expected rate of return on the market? a. 12.07 percent b. 12.77 percent c. 13.64 percent d. 14.09 percent 32. For a risky security to have a positive expected return but less risk than the overall market, the security must have a beta:...
1. A stock has an expected return of 9 percent, its beta is 0.5, and the...
1. A stock has an expected return of 9 percent, its beta is 0.5, and the risk-free rate is 3.6 percent. What must the expected return on the market be? rev: 09_20_2012 10.80% 15.12% 13.68% 14.98% 14.40% 2. You own the following portfolio of stocks. What is the portfolio weight of stock C? Stock Number of Shares Price per Share A 120 $38 B 810 $34 C 450 $58 D 260 $57 35.74 percent 20.30 percent 37.72 percent 64.26 percent...
Ch 02: Assignment - Risk and Return: Part 1 Term Answer Risk A Expected rate of...
Ch 02: Assignment - Risk and Return: Part 1 Term Answer Risk A Expected rate of return B Description The rate of return expected to be realized from an investment, calculated as the mean of the probability distribution of its possible returns. The term applied to the risk of an asset that is measured by the standard deviation of the asset's expected returns. The possibility that an actual outcome will be better or worse than its expected outcome The general...
10. What is their Expected Current Yield (CY)? 5.78% b. 6.09% c. 6.39% d. 7.50% e....
10. What is their Expected Current Yield (CY)? 5.78% b. 6.09% c. 6.39% d. 7.50% e. 6.25% 11. What is their Capital Gain Yield (CGY)? a. 0.54% b. 6.09% c. 0.42% d. 0.65% e. 0.62% 12. This bond is a discount bond. a. True b. False 13. What is their yield to Call (YTC)? a. 5.78% b. 14.93% e. 6.39% d. 9.43% e. 13.84% 14. Kimberly Motors has a beta of 1.40, the T-bill rate is 3.00%, and the T-bond...
A stock has a beta of 1.32 and an expected return of 13 percent. A risk-free asset currently earns 4.4 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If a portfolio of the two assets has a beta of.92, what are the portfolio weights? (Do not round intermediate calculations and...
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...
1. If nominal GDP in 2016 equals to $4,500 and real GDP for the year is $4,000 (in 2009 dollars), The GDP deflator in 2016 is and the rate of inflation since 2009 is a. 112.5, 12.5 percent. b. 88.9,-11.1 percent 12.5, insufficient information for the calculation of the rate of inflation. 11.1, insufficient information for the calculation of the rate of inflation. c. d. 2. Actual GDP is run. a. above, above b. below; below c. below; above d....
Ch 02: Assignment - Risk and Return: Part 1 Term Answer Risk A Expected rate of return B Description The rate of return expected to be realized from an investment, calculated as the mean of the probability distribution of its possible returns. The term applied to the risk of an asset that is measured by the standard deviation of the asset's expected returns. The possibility that an actual outcome will be better or worse than its expected outcome The general...
10. What is their Expected Current Yield (CY)? 5.78% b. 6.09% c. 6.39% d. 7.50% e. 6.25% 11. What is their Capital Gain Yield (CGY)? a. 0.54% b. 6.09% c. 0.42% d. 0.65% e. 0.62% 12. This bond is a discount bond. a. True b. False 13. What is their yield to Call (YTC)? a. 5.78% b. 14.93% e. 6.39% d. 9.43% e. 13.84% 14. Kimberly Motors has a beta of 1.40, the T-bill rate is 3.00%, and the T-bond...
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