Question: Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE): 4%; r = 10%; RPM = 6%, and beta = 1.2


Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE): 4%; r = 10%; RPM = 6%, and beta = 1.2 ERF = What is WCE's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. % If inflation increases by 2% but there is no change in investors' risk aversion, what is WCE's required rate of return now? Do not round intermediate calculations. Round your answer to two decimal places. % Assume now that there is no change in inflation, but risk aversion increases by 2%. What is WCE's required rate of return now? Do not round intermediate calculations. Round your answer to two decimal places. % If inflation increases by 2% and risk aversion increases by 2%, what is WCE's required rate of return now? Do not round intermediate calculations. Round your answer to two decimal places. % Quantitative Problem: You are given the following probability distribution for CHC Enterprises: State of Probability Rate of Economy return Strong 0.20 20% Normal 0.50 10% Weak 0.30 -6% What is the stock's expected return? Do not round intermediate calculations. Round your answer to two decimal places. % What is the stock's standard deviation? Do not round intermediate calculations. Round your answer to two decimal places. % What is the stock's coefficient of variation? Do not round intermediate calculations. Round your answer to two decimal places
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