Question: please show all work and if you could explain too! The risk-free rate is 1%. a) Find LCD's beta using the market model (Regression). (3

please show all work and if you could explain too!

The risk-free rate is 1%. a) Find LCD's beta using the market model (Regression). (3 pts) b) Draw the security market line. Use the average of rn. (3 c) If a stock that has a beta of 0.8 is currently expected to earn 5%, is the stock overvalued or undervalued? What is expected to happen to the stock's price and return? ( 3 pts)

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!

Use the following information. Month LCD stock S&P 500 (Market portfolio, rm) 1 5% -3% 2 9% 5% 3 7% 6% 4 10% 8% The risk-free rate is 1%. a) Find LCDs beta using the market model (Regression). b)...

Please Show all work. Thank you! Paul Corporation is a publicly traded company. You are looking to find the expected return of Paul Corporation using the Capital Asset Pricing Model. Table 3 contains...

Show all work please and thank you! Paul Corporation is a publicly traded company. You are looking to find the expected return of Paul Corporation using the Capital Asset Pricing Model. Table 3...

make a spreadsheet to show work. Assignment This assignment is a capital budgeting case with an extra twist in which you also need to figure out the firm's cost of capital. This involves a...

Hi Ruchi, I need help with the attached assignment. It's due in about a week. Thanks 1) The paper should be written in APA style Research Paper format. This is the link that explains the research...

I need question one answered. Attached are documents from the chapter to help add in the question. A 1 D E F Final Examination FINC 5880 3 5 6 7 8 9 10 11 C Question 6. (15 points) Your portfolio is...

Part 1. True / False Questions (50pts/5pts each) Read each problem carefully and circle your final answer . No partial credit will be given for the problems in Part 1. 1. [ True / False ] Assume that...

the company is AMAZON.COM LLC FINC 330 Project Description Research Project Part 2 Bond and Stock Performance Analysis OBJECTIVE In this part of the project you are to assume to have been hired to...

FINC 330 Project Description Research Project Part 2 Bond and Stock Performance Analysis OBJECTIVE In this part of the project you are to assume to have been hired to join a team serving as an...

The difference to two solutions of (1) is a solution of (2).

You own a fruit garden. Choose one of the followings by showing clear calculation. Yearly inflation rate is 5%. Option A: Invest 3 lac BDT to buy cultivation tools/factory. At end of every year you...

Which routing protocol is a Link - state routing protocol?

9. (15 points) A company is considering a new project that requires an investment of \$5 million. The project is expected to generate cash flows of $2 million in year 1,$3 million in year 2, and $4...

Influences on Nonverbal Communication?

3. Examine the language you use in computer-mediated-communication. Are there subtle ways in which you and your communication partners negotiate influence and create connectedness? Are any language...

2. Describe the similarities and differences you find in the language you use and the language a close friend or family member of the opposite sex uses over the course of a single conversation. What...