Question: According to the capital asset pricing model the expected return on shares in the Gamma Corporation is 12.6%. The beta value associated with these shares

According to the capital asset pricing model the expected return on shares in the Gamma Corporation is 12.6%. The beta value associated with these shares is 0.8 and the risk free rate of interest is 6%. Given this information, the expected return for the market portfolio is:

a. 1.425%

b. 0.0825

c. 0.1425

d. 6%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

If you desire no diversification, you should search for stocks with a correlation coefficient equal to: A) +1.0. B) 0.0. C) -1.0. D) +0.5. According to the capital asset pricing model the expected...

Qustion 12 0.5 points Save Answ According to the capital asset pricing model the expected return on shares in the Gamma Corporation is 10.6%. The beta value associated with these shares is 1.1 and...

a. An investor invested of his money in stock and stock and compare them to Near Return on SAIN Weight 0.65 Returns Weight:35 GS 0752 1521 2009 2010 2011 2012 15 17:23 0.25 1.22 5.32 2013 3.22 3.12...

ur results should be at least up to 4 decimal places) w pomer uestion 2 a. An investor invested 65% of his money in stock A and 35% in stock B and constructed a portfolio. The return data for both...

10 points Save Arriver Question 2 a. An investor invested 65% of his money in stock A and 35% in stock B and constructed a portfolio. The return data for both stock A and B are given below: Year...

Question 2 10 points Save Answer (Your results should be at least up to 4 decimal places) Question 2 a. An investor invested 65% of his money in stock A and 35% in stock B and constructed a...

cooperate financial management (a) An investor invested 65% of his money in stock A and 35% in stock B and constructed a portfolio. The return data for both stock A and B are given below. Year Return...

Hi tutor can you please help me with this question thanks . Question Completion Status: 10 points Save Answer (Your results should be at least up to 4 decimal places) Question 2 a. An investor...

An investor nvester 65% of his money in stock and 35% in stock b and constructed a portfolio the return data for both stock a and b are given brlow I.Calculate the correlation coefficient between...

Using the data in Exercise 9, assume that the company wants to make its plant more automated and is able to reduce the variable costs to $7.30 per unit, increase the fixed costs by $100,000 (i.e., to...

Consider the following system of equations. 20-3d- 2 2b+c-d 1 a+c-d = 3 a-3c+d = 1 (a) Write the system of equations as an augmented matrix. (3 points) (b) Reduce the system augmented matrix to...

1 Check my wo Consider the following $ 1 , 0 0 0 par value zero - coupon bonds: 5 points eBook Print References \ table [ [ Bond , Years to M turity , YTM ( % ) ] , [ A , 1 , 6 . 8 %

Answer questions #44 and #45 44. Consider a project with the following cash flows: The Payback Period of this project is 1.6 years. If the WACC for this project is 13%, what is the project's NPV...

What is the value of the coefficient of determination (R2)?

What additional data would be useful to understand the nature of the matched values?

(LO 3-2) Identify the behavior, error, or fraudulent scheme that could be detected when you apply Benfords law to the following accounts. Account 1. Sales records 2. Purchases Behavior Detected Using...