The regression below regresses Y = re -rf on X = rm -rf. The linear regression...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The regression below regresses Y = re -rf on X = rm -rf. The linear regression equation is given as 16% 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 4.00% 5.00% y = 1.4813x + 0.0008 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 1. What is the value of beta? 2. Is the stock riskier than the market? 3. Assume rf is 2%, and re is 15%, what is the implied return on the market based on the CAPM model? The regression below regresses Y = re -rf on X = rm -rf. The linear regression equation is given as 16% 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 4.00% 5.00% y = 1.4813x + 0.0008 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 1. What is the value of beta? 2. Is the stock riskier than the market? 3. Assume rf is 2%, and re is 15%, what is the implied return on the market based on the CAPM model?
Expert Answer:
Answer rating: 100% (QA)
Step 12 1 Beta is the value of the slope of the regression Based on the ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Graph the value of your portfolio as a function of the relevant stock price. Show ALL your work and use EXCEL for graphs (please display the formulas used once you're done) For each graph, graph for...
-
Anita Bailey is the newly appointed traffic man- ager for Orion Foods, a packer of a wide variety of fruits and vegetables sold throughout the United States. The first project given her by her boss,...
-
BUSN 6051: Supply Chain Management Orion Foods Inc. By Ronald H. Ballou
-
Assume that on January 1, 2016 an investor company paid $11,600 to an investee company in exchange for the following assets and liabilities transferred from the investee company: Investee's Estimated...
-
Bliny Corporation makes a product with the following standard costs for direct material and direct labor: During the most recent month, 5,000 units were produced. The costs associated with the months...
-
Federal Framework: Can I get some help answering this homework? Explore the Program Guideto learn more about reverse logistics, waste management,and government regulations. Discuss two topics that...
-
Examine Table 2-1 and discuss how the various information needs would be collected and reported by a companys AIS. Table 2-1 Overview of S&S's Business Processes, Key Decisions, and Information Needs...
-
The following account balances were included in the balance sheet of the Bromley Company on December 31, 2006: Land ..................$100,000 Land improvements ............ 20,000 Buildings...
-
Question 2 Given the following information, what will be the ex-dividend stock price of GG Corp. common stock? Assume perfect capital markets and that GG will distribute all of its cash as dividends....
-
In this section, you will select five stocks from the provided list and determine their values by applying an appropriate valuation model from the following options: price to multiple model (earning...
-
Client-server is an Architecture that performs both the functions of client and server to promote the sharing of information between them. It allows many users to have access to the same information...
-
What responsibilities do companies have regarding justice and care? Should business ethics be grounded on more concrete tenets? Why or why not?
-
What is the company's position on DEI? Do they have a clear policy or initiative around it? What actions could you take to ensure a diverse, inclusive, and equitable project team is assembled? What...
-
Avicorp has a $11.7 million debt issue outstanding, with a 5.9% coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is...
-
6. A sled travels down a slope and up the side. At which point does it have its greatest kinetic energy? 7. When a car crashes into another, the energy transfer goes into what? 8. The skater has a...
-
Suppose the mass of a fully loaded module in which astronauts take off from the Moon is 10,400 kg. The thrust of its engines is 27,500 N. (Assume that the gravitational acceleration on the Moon is...
-
A ladybug starts at the center of a 12-in.-diameter turntable and crawls in a straight radial line to the edge. While this is happening, the turntable turns through a 45 angle. (a) Draw a sketch...
-
Write a paper about medication error system 2016.
-
Describe the benefits and risks entailed with an experimental approach to regression analysis.
-
When the basic valuation model is adjusted using the risk-free rate, i, what economic factor is being explicitly accounted for?
-
Beta is a common measure of stock-market risk or volatility. It is typically estimated as the slope coefficient for a simple regression model in which stock returns over time are the dependent Y...
-
Classify each of the following costs relative to the cost object customer for a clothing retailer: Salesperson wages Store manager salary. Depreciation on furniture and fixtures. Cost of merchandise...
-
Number the following activities from 1 to 5 in the order corresponding to the typical flow of cost in a manufacturing company: Record the transfer of raw materials into production. Record cost of...
-
Complete the following T-accounts: Materials Inventory 320 ? 18,120 250 Wages Payable 9,000 300 Work-in-Process Inventory Finished Goods Inventory 1,000 ? ? 1,500 ? ? 9,000 ? 500 1,200
Study smarter with the SolutionInn App