1. Suppose the expected market risk premium is 7.5 percent and the risk free rate is...

    

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1. Suppose the expected market risk premium is 7.5 percent and the risk free rate is 3.7 percent. The expected return on TriStar's stock is 14.2 percent. Assume the capital-asset-pricing-model holds. What is the beta of TriStar's stock? 2. Consider the following two stocks: Beximco Bet a Expected (%) Return 1.4 25 0.7 14 Pharma BSRM Steel Assume the capital-asset-pricing-model holds. Based on the CAPM, what is the risk-free rate? What is the expected return on the market portfolio? 3. Suppose the risk-free rate is 3 percent, the expected return on the market portfolio is 13 percent, and its standard deviation is 23 percent. An Indian company, Bajaj Auto, has a standard deviation of 50 percent but is uncorrelated with the market. Calculate Bajaj Auto's beta and expected return. Ans: 3% 4. Suppose the risk-free rate is 3 percent, the expected return on the market portfolio is 13 percent, and its standard deviation is 23 percent. A German Company, Mueller Metals, has a standard deviation of 50 1. Suppose the expected market risk premium is 7.5 percent and the risk free rate is 3.7 percent. The expected return on TriStar's stock is 14.2 percent. Assume the capital-asset-pricing-model holds. What is the beta of TriStar's stock? 2. Consider the following two stocks: Beximco Bet a Expected (%) Return 1.4 25 0.7 14 Pharma BSRM Steel Assume the capital-asset-pricing-model holds. Based on the CAPM, what is the risk-free rate? What is the expected return on the market portfolio? 3. Suppose the risk-free rate is 3 percent, the expected return on the market portfolio is 13 percent, and its standard deviation is 23 percent. An Indian company, Bajaj Auto, has a standard deviation of 50 percent but is uncorrelated with the market. Calculate Bajaj Auto's beta and expected return. Ans: 3% 4. Suppose the risk-free rate is 3 percent, the expected return on the market portfolio is 13 percent, and its standard deviation is 23 percent. A German Company, Mueller Metals, has a standard deviation of 50

Answer rating: 100% (QA)

Answer Lets break down each question step by step 1 To find the beta of TriStars stock using the Capital Asset Pricing Model CAPM we use the formula t... View the full answer