Question: he expected return on the market is 9%. The CAPM required rate of return on a stock with a beta of 1.5 is 14%. What

he expected return on the market is 9%. The CAPM required rate of return on a stock with a beta of 1.5 is 14%. What is the risk-free rate?

0.33%
8%
1%
3%

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!

Q:

The balance sheet for the Delphine, Xavier, and Olivier partnership follows: Cash $ 78,000 Liabilities $ 52,500 Noncash assets 150,000 Delphine, capital 67,800 Xavier, capital 65,000 Olivier, capital...

Q:

The expected return on the market is 9%. The CAPM required rate of return on a stock with a beta of 1.5 is 14%. What is the risk-free rate? 3% 1% 8% 0.33%

Q:

The expected return on the market is 9%. The CAPM required rate of return on a stock with a beta of 1.5 is 14%. What is the risk-free rate? 0.33% 1% 3% 8%

Q:

The expected return on the market is 10%. The CAPM required rate of return on a stock with a beta of 1.5 is 14%. What is the risk-free rate? 15% 5% 0.33% 2%

Q:

The expected return on the market is 10%. The CAPM required rate of return on a stock with a beta of 1.5 is 14%. What is the risk-free rate? 5% 0.33% 15% 2%

Q:

Your company has historically maintained a constant debt-equity ratio of 0.25. The product your company is selling has a very volatile demand depending on the market conditions: this means that the...

Q:

2 point The expected return on the market is 7%. The CAPM required rate of return on a stock with a beta of 1.5 is 11%. The risk-free rate is Instruction: Type your answer in the unit of percentage...

Q:

Problem 3 : Models and Mis - pricings The expected return of the market is E ( rM ) = 1 4 % , while the risk - free rate is rf = 6 % . Stock \ beta E ( r ) Stock is one on left and E ( r ) is one on...

Q:

1) Acme Dynamite Company common stock has a beta of 1.60. The expected return on the market is 9%, and the risk-free rate is 5%. What is the required return on Acmes common stock according to the...

Q:

Tweety has a portfolio worth a total of $76,000 with $13,800 in stock A;$48,600 in stock B; $8,400 in stock C ; and remaining amount in a risk-free treasury bills. The beta of stock A is 1.21 and...

Q:

8) L-) relates risk to return, for a given set of market conditions. If which of the following would most likely occur? 8) The security ma byPhe market risk premium would increase C) The SML line...

Q:

I need a SEO optimized article on the topic 10 computer hacks you don 't know Explain a little each hack, I mean how does it work Take help form bright side a youtube channel and please don't copy...

Q:

A $5,000 Vancouver Internal Airport bond issued on June 7, 2004, with 14 years to maturity has a coupon rate of 4.42%. It was sold on January 7, 2010, when market rates were 4.07%: a) Market Value b)...

Q:

Estimate the appropriate linear probability and logistic regression models and compute their accuracy rates. Note: Do not round intermediate calculations and round final answers to 2 decimal places.

Q:

Let x be normally distributed with mean \\\\mu =143 and standard deviation \\\\sigma =34 .\ a. Find P(x . (Round your final answer to 4 decimal places.)\ P(x \ b. Find P(95 . (Round your final answer...