Question: If the risk free rate equals 4 and a stock with
If the risk-free rate equals 4% and a stock with a beta of 0.75 has an expected return of 10%, what is the expected return on the market portfolio?
Answer to relevant QuestionsYou believe that a particular stock has an expected return of 15%. The stock’s beta is 1.2, the risk-free rate is 3%, and the expected market risk premium is 6%. Based on this, is your view that the stock is overvalued or ...In statistics, you learn about Type I and Type II errors. A Type I error occurs when a statistical test rejects a hypothesis when the hypothesis is actually true. A Type II error occurs when a test fails to reject a ...Suppose that a 30-year U.S. Treasury bond offers a 4% coupon rate, paid semiannually. The market price of the bond is $1,000, equal to its par value. a. What is the payback period for this bond? b. With such a long payback ...A certain investment requires an initial outlay of $12 million and subsequently produces annual cash inflows of $1.4 million in perpetuity. A firm evaluating this investment uses a discount rate of 10%. What is the ...Butler Products has prepared the following estimates for an investment it is considering. The initial cash outflow is $20,000, and the project is expected to yield cash inflows of $4,400 per year for seven years. The firm ...
Post your question