At the beginning of the year, you bought three stocks with different betas. The risk-free rate...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
At the beginning of the year, you bought three stocks with different betas. The risk-free rate is 2.8%. Unfortunately, the market portfolio had a negative return of -6.2% during the year. Market Return T-Bill Yield -6.2% 2.8% A) Suppose that Beta is 0.6. What is the expected return? The expected return is %6. Round your answers to the nearest two decimal places. Include a negative sign if the expected return is negative. B) Suppose that Beta is 1.0. What is the expected return? The expected return is %. Round your answers to the nearest two decimal places. Include a negative sign if the expected return is negative. C) Suppose that Beta is 1.5. What is the expected return? The expected return is %. Round your answers to the nearest two decimal places. Include a negative sign if the expected return is negative. At the beginning of the year, you bought three stocks with different betas. The risk-free rate is 2.8%. Unfortunately, the market portfolio had a negative return of -6.2% during the year. Market Return T-Bill Yield -6.2% 2.8% A) Suppose that Beta is 0.6. What is the expected return? The expected return is %6. Round your answers to the nearest two decimal places. Include a negative sign if the expected return is negative. B) Suppose that Beta is 1.0. What is the expected return? The expected return is %. Round your answers to the nearest two decimal places. Include a negative sign if the expected return is negative. C) Suppose that Beta is 1.5. What is the expected return? The expected return is %. Round your answers to the nearest two decimal places. Include a negative sign if the expected return is negative.
Expert Answer:
Answer rating: 100% (QA)
To calculate the expected return of each stock we will use the ... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
a. Stock market index information: S&P 500 (stock) index level: Nasdaq Composite (stock) index level: b. Interest rate information : Prime rate: Federal funds rate: Commercial paper rate (90 days):...
-
The expected pretax return on three stocks is divided between dividends and capital gains in the following way: Expected Dividend Expected Capital Gain Stock $0 $10 5 5 10 Required: a. If each stock...
-
In February, a new company incurred the following total costs for the production of 10,000 units during its first month of operations: Variable Fixed $500,000 $350,000 Manufacturing Overhead $250,000...
-
Cost of goods manufactured. Consider the following account balances (in thousands) for the Canseco Company: If you want to use Excel to solve this problem, go to the Excel lab at...
-
(a) A random voltage \(v(t)\) has an exponential distribution function \(f_{V}(v)=a \exp \{-a v\}\), where \((a>0) ;(0 \leq v 0.5\}\).
-
Which of the following is a fraud in which later payments on account are used to pay off earlier payments that were stolen? a. lapping b. kiting c. Ponzi scheme d. salami technique
-
Sally Omar is the manager of the office products division of Wallace Enterprises. In this position, her annual bonus is based on an appraisal of return on investment (ROl) measured as Division Income...
-
Step acquisition of investee's shares A parent company may acquire an investee's shares in steps. Give a detailed discussion on the appropriate accounting treatment for step acquisition of investee's...
-
Cardinal Company is considering a five-year project that would require a $2,975,000 investment in equipment with a useful life of five years and no salvage value . The company's discount rate is 14%....
-
A simple trust has one beneficiary and in the current year has interest income of 8,000.00, tax exempt interest of$6,000.00, c/g income of$4,000 and fiduciary fees expense of $2,000.00 (allocable to...
-
Errors could occur on which of the following lines? 1 int x = 7; 2 int y &x; cout < < y < < endl; 4 cout < < y < < endl; 5 delete y;
-
Explain what farm-to-plate/table is to you. How does it positively affect our environment and economy? What do you do to try to be more farm-to-plate? Does a restaurant advertising Farm-to-plate draw...
-
You and your partner are assigned to investigate the disappearance of John Appling. Appling's roommate filed a missing person's report. The roommate was interviewed and provided the following...
-
Assume Gillette Corporation will pay an annual dividend of $0.68 one year from now. Analysts expect this dividend to grow at 12.8% per year thereafter until the 4th year. Thereafter, growth will...
-
Today, technology has changed everything. Individuals now buy drugs on the Internet and Tweet about their latest visit to the physician's office. They can rate their doctors on healthgrades.com. They...
-
a. Consider potential keywords that relate to the company Holyoke Sporting Goods website and enter on google trends. b. write down present keywords that you think would be strong keywords to focus...
-
Les has collected stamps in his spare time for years. He purchased many of his stamps at a price much lower than the current market value. Les recently lost his job as a carpenter. Since his wife...
-
Find the interest rates, or rates of return, on each of the following: a. You borrow $700 and promise to pay back $749 at the end of one year. b. You lend $700 and receive a promise to be paid $749...
-
What is the expected return of the following investment? Probability Payoff 0.3 30.0% 0.2 10.0 0.5 -2.0
-
Describe the relationships between accounts payable, inventories, accounts receivable, and the cash account by tracing the effects on these accounts of a product manufactured and sold by a company....
-
On January 1, 2018, Ranier, Inc., issued \(\$ 300,000\) of ten percent, 15 -year bonds for \(\$ 351,876\), yielding an effective interest rate of eight percent. Semiannual interest is payable on June...
-
The Peoples National Bank raised capital through the sale of \(\$ 100\) million face value of four percent coupon rate, ten-year bonds. The bonds paid interest semiannually and were sold at a time...
-
The financial statements for the Columbia Sportswear Company can be found in Appendix A at the end of this book. Required Answer the following questions: a. How much were Columbia's current...
Study smarter with the SolutionInn App