Consider the CAPM. The risk-free rate is 6% and the expected return on the market is 18%.

Fantastic news! We've Found the answer you've been seeking!

Question:

Consider the CAPM. The risk-free rate is 6% and the expected return on the market is 18%. What is the expected return on a stock with a beta of 1.3?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-1259722615

9th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

See More Books

Posted Date: Jan 13, 2020 05:36 AM

See More Questions

The risk-free rate is 2.99% and the expected return on the market portfolio is 7.5%. You have decided to invest in a portfolio of Apple, General Dynamics, Walmart, and Freeport-McMoran. The beta of...
Your analysis shown that a stock with a beta of 1.5 will have a return of 20% over the next year. A risk-free asset currently earns 4%, and the market portfolio currently earns 10%. a) Based on your...
The Swiss risk free rate is 7.15%. If the Swiss national market return has a mean of 11% and a standard deviation was 24.4%, what is the ex-post return/risk performance of the market?
Is CSCH3CO2 ionic or covalent ? Name it QUESTION 7 Is rubidium dichromate ionic or covalent ? Write its formula QUESTION 8 s copper m suhde soric or covaent write its formula QUESTION 9 Is vanadium...
Lithography produces projected shapes; consequently, true three-dimensional shapes are more difficult to produce. Which of the processes described in this chapter are best able to produce...
Explain the effect of each of the following events on the quantity of U.S. real GDP demanded and the demand for U.S. real GDP: The world economy goes into a strong expansion. The U.S. price level...
A university pumps its water from wells located on campus. The falling water table has caused pumping costs to increase, the quantity of water available to decrease, and the quality of water to...
Complete the balance sheet of Flying Roos Corporation. You have the following information: Debt ratio = 40% DSO = 39 days Current ratio = 1.5 Inventory turnover ratio = 3.375 Sales = $2.25 million...
An electric power company regulated by the state is a monopoly enterprise. 1Suppose the regulator sets the price to reflect what the market will look like if it is competitive. 2Now suppose that the...
_____________showed that____________. Georgia's Resolution of Secession/it would be the first state to leave the Union Lincoln's election/the Whig party retained its strength Crittendon's...
What are the configuration options that will allow DHCP traffic to be forwarded through a router? (4 points) IPv6 does not use broadcast. Explain how SLAAC and DHCP use ICMPv6 NS/ND and RS/RA...
Look back at Figure 8 6A. Fig 8-6A (a). Run the percentages vertically and explain what they mean. (b). Express all numbers in the table as a percentage of the total number of people sampled (586)...
Customers arrive to a service center according to a Poisson process with a rate of 30 per hour. Service times are exponentially distributed with a mean of 12 minutes. a. What is the minimum number of...
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn. The assignor of a contract right becomes a guarantor.
Distinguish between adversarial and inquisitorial justice.
Which goal of the criminal law do you prefer, and why?
Graph the function. Be sure to label three points on the graph. f(x)=x Given the x-coordinates, determine the y-coordinates of the three points on the graph. 0 1 2 (Simplify your answers. Type...
If there is an unrealized holding gain on available-for-sale investments, it is reported as?
For each of the following pairs, is firm A or firm B more likely to grant the longer credit period? a. Firm A sells hardware; firm B sells bread. b. Firm A's customers have an inventory turnover...
A factory costs $400,000. You forecast that it will produce cash inflows of $120,000 in year 1, $180,000 in year 2, and $300,000 in year 3. The discount rate is 12%. a. What is the value of the...
Capital. A junior analyst at Camberwell Corp. has jumbled the items on its balance sheet. Can you help him calculate the value of a. Camberwell's current assets, b. Its current liabilities, and c....
Why may some people consider this to be incorrect? That is, why is the fact that the control account is kept in the General Ledger not enough to justify saying that the control account is part of the...
From the following figures, compile accounts receivable ledger and accounts payable ledger control accounts for the month, and ascertain what the net balances of the respective ledgers should be on...
The financial year of The Better Trading Company ended on 30 November 2014. You have been asked to prepare a Total Accounts Receivable Account and a Total Accounts Payable Account in order to produce...

Consider the CAPM. The risk-free rate is 6% and the expected return on the market is 18%.

Question:

Expert Answer:

according to capm ReRfbeta R... View the full answer

Fundamentals of Corporate Finance

Students also viewed these finance questions