You are considering an investment in Zoon, a video-conferencing startup. The risk-free rate is 0% and...
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You are considering an investment in Zoon, a video-conferencing startup. The risk-free rate is 0% and you put together the following scenario analysis on the future development of the economy, which is largely dependent on recovery from the pandemic: Probability Scenario Full lockdown Partial lockdown Few restrictions No restrictions 10% 25% 45% 20% Return to Market Portfolio -5.0% 0.0% 3.0% 10.0% Return to Zoon c) What is Zoon's CAPM-beta? (4 points) d) What should the expected return for Zoon be, according to the CAPM? (4 points) 10.0% 4.0% 0.0% -3.0% You are considering an investment in Zoon, a video-conferencing startup. The risk-free rate is 0% and you put together the following scenario analysis on the future development of the economy, which is largely dependent on recovery from the pandemic: Probability Scenario Full lockdown Partial lockdown Few restrictions No restrictions 10% 25% 45% 20% Return to Market Portfolio -5.0% 0.0% 3.0% 10.0% Return to Zoon c) What is Zoon's CAPM-beta? (4 points) d) What should the expected return for Zoon be, according to the CAPM? (4 points) 10.0% 4.0% 0.0% -3.0%
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c To find Zoons CAPMbeta we need to first calculate the expected return for the market p... View the full answer
Related Book For
Finance Applications and Theory
ISBN: 978-0077861681
3rd edition
Authors: Marcia Cornett, Troy Adair
Posted Date:
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