9:50 K Chapter 7 Homework Accepi Problem 4 K Intro Use the expected return-beta equation from the CAPM. Part 1 7 8 Attempt 1/10 for 10 pts. What is the expected return for a stock if the risk-free rate is 4%, beta 0.9 and the expected return for the market portfolio is 7%? 3+ decimals Submit Show all parts About Blog Contact Instructor Guide Privacy Policy Support Terms & Conditions Accepi 2012 - 20249:57 K Chapter 7 Homework Accepi Intro You've analyzed IBM's stock and expect it to deliver a return of 8% over the next year. The stock has a beta of 0.6. The risk-free rate is 2.5% and the expected market risk premium is 4.5%. Part 1 Attempt 1/10 for 10 pts. What is the security's expected alpha? 4+ decimals Submit Part 2 I Attempt 1/10 for 10 pts. What is the security's expected alpha in equilibrium according to the CAPM? 0+ decimals Submit9:51 K Chapter 7 Homework Accepi = Problem 5 K Intro We know the following expected returns for stock A and the market portfolio, given different states of the economy: State (s) Probability E(rA,s) E(rM,s) Recession 0.3 -0.03 0.03 Normal 0.5 0.12 0.06 Expansion 0.2 0.2 0.1 The risk-free rate is 0.02. Part 1 B | Attempt 1/10 for 10 pts. Assuming the CAPM holds, what is the beta for stock A? 2+ decimals Submit About Blog Contact Instructor Guide Privacy Policy oupport TomIS a conditionsS Chapter 7 Homework Accepi Part 2 @ 2 Attempt 1/10 for 10 pts. What is the risk-free rate if beta is 1.1, the expected return 7.35% and the expected return for the market portfolio is 7%7? 4+ decimals Part 3 B B Attempt 1/10 for 10 pts. What is beta if the risk-free rate is 4%, the expected return 12% and the expected return for the market is 7%7 2+ decimals Part 4 B B Attempt 1/10 for 10 pts. What is the expected return for the market if the risk- free rate is 4%, beta 0.9 and the expected return 12%7? 3+ decimals