Question: 5. Last year, Rocket Inc. earned a 19% return. Farmer's Corp. earned 11%. The overall market return last year was 16%, and the risk-free rate
5. Last year, Rocket Inc. earned a 19% return. Farmer's Corp. earned 11%. The overall market return last year was 16%, and the risk-free rate was 2%. If Rocket stock has a beta of 1.8 and Farmer's has a beta of 0.5, which stock performed better once you take risk into account? Review Only Click the icon to see the Worked Solution. Rocket's expected return is % (Enter as a percentage and round to one decimal place.) Farmer's expected return is %. (Enter as a percentage and round to one decimal place.) Which stock performed better once you take risk into account? (Select the best answer below.) O A. Given its beta, Rocket should have earned a much higher return than it did (11% vs 19%). Farmer's, on the other hand, earned a higher return than we would have expected (27.2% vs 9,0%). So taking risk into account, Rocket was the better stock B. Given its beta, Rocket should have earned a much higher return than it did (27.2% vs 19%). Farmer's, on the other hand, earned a higher return than we would have expected (11% vs. 9.0%). So, taking risk into account, Farmer's was the better stock OC. Given its beta, Rocket should have earned a much lower return than it did (11% vs 9.0%). Farmer's, on the other hand, earned a higher return than we would have expected (19% vs 27.2%). So taking risk into account, Rocket was the better stock OD. Given its beta, Rocket should have eamed a much higher return than it did (272% vs 19%). Farmer's, on the other hand, earned a lower return than we would have expected (9.0% vs 11%). So taking risk into account, Rocket was the better stock
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