1-Suppose the risk-free return is 3.5% and the market portfolio has an expected return of 11.2% and...

Fantastic news! We've Found the answer you've been seeking!

Question:

1-Suppose the risk-free return is 3.5% and the market portfolio has an expected return of 11.2% and a volatility of 17.9%. Merck & Co. (Ticker: MRK) stock has a 21.5% volatility and a correlation with the market of 0.045.

a. What is Merck's beta with respect to the market?

b. Under the CAPM assumptions, what is its expected return?

Posted Date: May 19, 2024 11:15 AM

See More Questions

Explain how the demand for health insurance is related to the demand for health care. Would the demand for health care then depend also on whether the person paid for the insurance or alternatively...
The effective stresses at failure for three identical triaxial specimens of an over-consolidated clay are shown in Fig. P13.49. Plot the Mohr circles at failure and determine ' and c'. Determine the...
Assume that it is now January 1, 2009. Wayne-Martin Electric Inc. (WME) has developed a solar panel capable of generating 200% more electricity than any other solar panel currently on the market. As...
Tell whether each of the following actions will increase, decrease, or have no effect on total assets, total liabilities, and total stockholders equity: 1. Declaration of a stock dividend 3. Stock...
Gamble Manufacturing produces two modems, one for laptop computers and the other for desktop computers. The production process is automated, and the company has found activity-based costing useful in...
Calculate the free cash flows given the information in the screenshot provided \f
State of Economy Boom Normal Bust Probability of State of Economy .30 1.40 .30 Rate of Return If State Occurs Stock A .27 .23 .01 Stock B .32 .18 -.32 Stock C .55 15 -.48 a-1 If your portfolio is...
What is the stance of Reid et al. (2012) regarding the imposition of negative sanctions for staff performance ? Explain
Discuss the following for your product or service: Marketing Mix Product strategy - in addition to career clothing, what other products should the Consignment Store carry and what is your strategy...
1. Allocate the 400 points according to time invested, and then allocate the points according to pages produced. Decide how you would allocate the points to group members if you were Ron, using...
Assume Zo's utility function is U(C, L) = CL where C is consumption measured by her total income and L is leisure. Total income is labour income and non-labour income. She has y = $400 non-labour...
The average and standard deviation for ACT scores are 20 and 3 respectively. The average and standard deviation for SAT scores are 1050 and 150 respectively. Student A that scored a 28 on their ACT...
Do you think that the decline in oil prices is a sign to a larger issue that we could be facing?
The polar coordinates of a point are given. Find the rectangular coordinates of the point. (-1, - /3)
Corporate headquarters expenses (Learning Objective 5) In Exhibit 10-20, the next to last line of the CEOs report consists entirely of expenses. Describe the kinds of expenses that would be included...
Management by exception (Learning Objective 5) Look at the performance report in Exhibit 10-20. According to the management by exception principle, on which variances should the manager of the...
Prepare a sales budget for a not-for-profit organization (Learning Objective 2) Great Start Preschool operates a not-for-profit morning preschool. Each family pays a nonrefundable registration fee of...

1-Suppose the risk-free return is 3.5% and the market portfolio has an expected return of 11.2% and...

Question:

Expert Answer:

Students also viewed these finance questions