Question: Estimate the stock return by using APT Model. The particulars are as follows; the expected return of the market is 11 per cent and the
Estimate the stock return by using APT Model. The particulars are as follows; the expected return of the market is 11 per cent and the risk-free rate of interest is 6 per cent.
| Factors | Market Price of Risk | Sensitivity Index |
| Inflation | 9% | 1.1 |
| Foreign Direct Investment | 5% | 0.8 |
| Forex Rate | 4% | 1.0 |
| GDP | 5% | 0.6 |
a) 7%
b) 10 %
c) 8.55%
d) None of them
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
