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Texas. The firm is evaluating the stock of four different firms for possible inclusion in its fund holdings. As part of their Sante Capital operates two mutual funds headquartered in Houston, analysis, Sante's managers have asked their junior analyst to estimate the investor-required rate of return on each firm's shares using the CAPM and the following estimates: The rate of interest on short-term U.S. Treasury securities is currently 4.5 percent, and the expected return for the market portfolio is 11.5 percent. What should be the expected rates of return for each investment? Security ork 5 B с x5 Beta 1.66 0.64 1.12 0.82 a. The expected rate of return for security A, which has a beta of 1.66, is%. (Round t two decimal places.) Question 9, P8-14 (similar to) Part 1 of 2 (Expected rate of return using CAPM) K a. Compute the expected rate of return for Acer common stock, which has a 1.8 beta. The risk-free rate is 7 percent and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of 14 percent. b. Why is the rate you computed the expected rate? HW Score: 29.67%, 44.5 of 150 points O Points: 0 of 10 CITT Question 8, P8-13 (similar to) Part 1 of 2 a. The expected rate of return for Acer common stock is %. (Round to one decimal place.) vay/220:41 PM HW Score: 29.67%, 44.5 of 150 points O Points: 0 of 10 Save Save (Expected rate of return using CAPM) a. Compute the expected rate of return for Intel common stock, which has a 1.3 beta. The risk-free rate is 5 percent and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of 12 percent. b. Why is the rate you computed the expected rate? ct: 0 ct::o Texas. The firm is evaluating the stock of four different firms for possible inclusion in its fund holdings. As part of their Sante Capital operates two mutual funds headquartered in Houston, analysis, Sante's managers have asked their junior analyst to estimate the investor-required rate of return on each firm's shares using the CAPM and the following estimates: The rate of interest on short-term U.S. Treasury securities is currently 4.5 percent, and the expected return for the market portfolio is 11.5 percent. What should be the expected rates of return for each investment? Security ork 5 B с x5 Beta 1.66 0.64 1.12 0.82 a. The expected rate of return for security A, which has a beta of 1.66, is%. (Round t two decimal places.) Question 9, P8-14 (similar to) Part 1 of 2 (Expected rate of return using CAPM) K a. Compute the expected rate of return for Acer common stock, which has a 1.8 beta. The risk-free rate is 7 percent and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of 14 percent. b. Why is the rate you computed the expected rate? HW Score: 29.67%, 44.5 of 150 points O Points: 0 of 10 CITT Question 8, P8-13 (similar to) Part 1 of 2 a. The expected rate of return for Acer common stock is %. (Round to one decimal place.) vay/220:41 PM HW Score: 29.67%, 44.5 of 150 points O Points: 0 of 10 Save Save (Expected rate of return using CAPM) a. Compute the expected rate of return for Intel common stock, which has a 1.3 beta. The risk-free rate is 5 percent and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of 12 percent. b. Why is the rate you computed the expected rate? ct: 0 ct::o
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Related Book For
Financial Management Principles and Applications
ISBN: 978-0134417219
13th edition
Authors: Sheridan Titman, Arthur J. Keown, John H. Martin
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