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

Where: E (RAMP) = Rrf + BAMP (E(Rm) Rrf) E(RHVN) = Rrf

E(Rm)0.378457486
Rrf0.0383998
βAMP0.826241144
βHVN0.659884137
βSUN0.570893332



 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 Price3.792667
HVN Ending Price4.69
SUN Starting Price15.16
SUN Ending Price9.74
YearDividend_HVNDividend_SUN
20150.1920340.514933
20160.2180510.700309
20170.2296440.751802
20180.2250830.422245
20190.2570791.204943
20200.260.36
 

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

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

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

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!