Question: Compute the expected returns for AMP, HVN and SUN using the CAPM E(Rm) 0.378457486 Rrf 0.0383998 AMP 0.826241144 HVN 0.659884137 SUN 0.570893332 Consider the given
Compute the expected returns for AMP, HVN and SUN using the CAPM
| E(Rm) | 0.378457486 |
| Rrf | 0.0383998 |
| βAMP | 0.826241144 |
| βHVN | 0.659884137 |
| βSUN | 0.570893332 |
Consider the given dividend data. Assume a client bought one share of HVN and one shares of SUN on 01/1/2015 and she decides to hold the shares for five years and sell the two shares on 1/12/2020. Calculate the holding period return using the close price for the two shares considering shares pay dividend. The client is unsure if she has made a good decision by selling the shares of two companies. What advice would you give the client based on your analysis and comparison to above part.
| HVN Starting Price | 3.792667 |
| HVN Ending Price | 4.69 |
| SUN Starting Price | 15.16 |
| SUN Ending Price | 9.74 |
| Year | Dividend_HVN | Dividend_SUN |
| 2015 | 0.192034 | 0.514933 |
| 2016 | 0.218051 | 0.700309 |
| 2017 | 0.229644 | 0.751802 |
| 2018 | 0.225083 | 0.422245 |
| 2019 | 0.257079 | 1.204943 |
| 2020 | 0.26 | 0.36 |
Where: E (RAMP) = Rrf + BAMP (E(Rm) Rrf) E(RHVN) = Rrf + BHVN(E(Rm) Rrf) E(Rsun) = Rrf + BsUN(E(Rm) Rrf) Rrf is the average of the monthly risk-free rate E (Rm) is the average of the All Ords. Note: provide final answer in 2 decimal places showing your full work
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Using the CAPM formula we can calculate the expected returns ERAMP Rrf BAMPERm Rrf ERHVN Rrf BHVNERm Rrf ERSUN Rrf BSUNERm Rrf Lets calculate the expected returns for AMP HVN and SUN ERAMP 00383998 08... View full answer
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