Question: (Show Work for this Quantitative Question ) Suppose the risk-free return is 4% and the market portfolio has an expected return of 10% and a
(Show Work for this Quantitative Question ) Suppose the risk-free return is 4% and the market portfolio has an expected return of 10% and a volatility of 16%. Johnson and Johnson Corporation (Ticker: JN]) stock has a 50% volatility and a correlation of 0.032 with the market Answer the questions below. (Round to 2 decimal places A. Johnson and Johnson's beta is: B. Under the CAPM assumptions, Johnson and Johnson's required rate of return (in %) is: C. If expected return for Johnson and Johnson's stock is 6%, is the stock under valued or over-valued? D. Explain your answer for C here
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