Apply the CAPM to value the tech stocks of the table below. What are the systematic and
Fantastic news! We've Found the answer you've been seeking!
Question:
Apply the CAPM to value the tech stocks of the table below.
What are the systematic and idiosyncratic variances of each tech stock?
You can assume that the latest risk-free rate is 0.08%.
Correlations | ||||||||
Market Caps (trillion) | Price | Expected return | Volatility | Alphabet | Amazon | Apple | Microsoft | |
Alphabet | $1.75 | $2,653.64 | 20.90% | 40.60% | 1 | 0.87 | 0.75 | 0.92 |
Amazon | $1.49 | $2,936.35 | 24.50% | 49.20% | 0.87 | 1 | 0.81 | 0.88 |
Apple | $2.59 | $158.52 | 25.40% | 35.20% | 0.75 | 0.81 | 1 | 0.85 |
Microsoft | $2.14 | $285.59 | 26.60% | 39.10% | 0.92 | 0.88 | 0.85 | 1 |
S&P 500 | 13.80% | 26.80% | 0.87 | 0.88 | 0.91 | 0.93 |
Related Book For
Financial Management for Decision Makers
ISBN: 978-0138011604
2nd Canadian edition
Authors: Peter Atrill, Paul Hurley
Posted Date: