Question: Based on the CAPM, what is the expected return to a stock with a beta of 0.7? Risk free T-Bills earn a 2% return and

Based on the CAPM, what is the expected return to a

Based on the CAPM, what is the expected return to a stock with a beta of 0.7? Risk free T-Bills earn a 2% return and the market's expected return is 12.6%. Provide your answer in percent, rounded to two decimals, omitting the % sign

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!

Unimak ne stock is expected to eam 15 percent in a boom economy and percent in a normal economy. There is a 35 percent chance the economy will be boom and 65 percent chance the economy will be nomal...

Based on the CAPM, what is the expected return to a stock with a beta of 0.8? Risk free T-Bills earn a 4% return and the market's expected return is 9%. Provide your answer in percent, rounded to two...

stock pays no dividend and currently trades at $56. Based on the CAPM and assuming an expected return on the market of 11.9% and a risk free rate of 6.8%, the expected price for one year from now is...

Nicolass Inc. stock pays no dividend and currently trades at $56. Based on the CAPM and assuming an expected return on the market of 1.6% and a risk free rate of 4.6%, the expected price for...

QUESTION 1 Company XYZ wants to determine the optimal capital structure. Below is a table prepared for by the financial manager of the company. B/S Ki Ke Ko B/(B+S) S/(B+S) levered beta 0.00 3.00%...

What is the interpretation of and in the CAPM regression? What restriction does the CAPM place on the value of ? What is the interpretation of and in the CAPM regression? What restriction does the...

2. [5 points] The equity analyst in one prominent investment bank is about to provide the recommendation of individual stock for investors. He assumes that the CAPM is a good description of stock...

the expected return on the market portfolio is 12%. the risk free rate is 2%. the expected return on stock a is 14%. the beta of stock A is 1.3 within the context of the CAPM, what is the alpha of...

Say the expected return on a stock market is 4.2%, the risk free rate is 1.8% and a particular stock has a beta of 1.05. Calculate the expected return for this stock using the capital asset pricing...

Solve the following questions the expected return on a stock is 10 per cent. Risk free rate of return is 4 per cent and coackeretutis percent. What is the If the value of expected return of Galfar...

An IT executive, Felicia Finley, from Jersey IT Innovators, Inc., has asked that you design a graphical user interface for an executive desktop to help her in her work. Use icons for file cabinets, a...

During the year, Success Ltd shares have increased from $8 to $9 and shareholders received a final dividend of 50 cents per share, fully franked at the company tax rate of 30 per cent. Calculate...

QUESTION 5 Choose the correct callout for a counterbored clearance through hole for a 1 4 " socket - head cap screw. . 2 6 6 O . 4 3 8 V . 2 5 0 . 2 6 6 . 4 3 8 , . 2 5 0 O . 2 6 6 O . 4 3 8 . 2 5 0...

9. (15 points) A company is considering a new project that requires an investment of \$5 million. The project is expected to generate cash flows of $2 million in year 1,$3 million in year 2, and $4...

V. Conclusion and follow-up A. Take any questions or concerns B. Establish next meeting time and what should be accomplished by then?

3 As the groups leader, do you have a responsibility to these interns to ensure that they get the most from their internship experience?

How do cognitive, psychological, and social forces affect decision making in groups youre currently involved in? Have these forces ever caused your group to make a poor decision? If so, how?