Question: Suppose that a company's expected return is 12.3% and it has a beta of 1.1. The market portfolio return is 11% and the risk-free

Suppose that a company's expected return is 12.3% and it has a

Suppose that a company's expected return is 12.3% and it has a beta of 1.1. The market portfolio return is 11% and the risk-free rate is 3%. Company Return 12.3% Beta Market Return T-Bill Yield 1.1 11% 3% What is the company's excess return and company's risk premium? The company's excess return is % while the risk premium is %. Round your answers to the nearest two decimal places.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The companys excess return is the difference between the expe... View full answer

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!

Figure 9.8 shows an ER schema for a database that may be used to keep track of transport ships and their locations for maritime authorities. Map this schema into a relational schema, and specify all...

Suppose that the market portfolio has an expected return of 11.3% and the T-Bill yield is 1.8%. Market Return T-Bill Yield 11.3% 1.8% A) Suppose that Beta is 0.6. What is the expected return? The...

The following are monthly percentage price changes for four market indexes. Compute the following. a. Average monthly rate of return for each index. Round your answers to five decimal places. DJIA:...

The treasurer of Kelly Bottling Company (a corporation) currently has $200,000 invested in preferred stock yielding 10 percent. He appreciates the tax advantages of preferred stock and is considering...

please help this is a timed assignment and don't understand the concept. QUESTION 1 1. The standard deviation measures: diversifiable risk systematic risk economic risk unsystematic risk total risk 1...

51. The relationship between nominal returns, real returns, and inflation is referred to as the: A. call premium. B. Fisher effect. C. conversion ratio. D. spread. E. current yield. 52. Which of the...

Hello, this is the 3rd time I am posting these questions but got the answers wrong and have paid for all the times. Please can you give me the correct ans this time? Thank you for your coorperation....

This portion of the exam is worth 72% of your final exam grade. The other 30% was handed out in the last class. If you do not have the information from the last class, you will need to contact me to...

a. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVx= CVy= b. Which stock is riskier for a diversified investor?...

please help me. I can pay only 70 dollars in this assignment Topic 1 & 2 Introduction to financial management and the Australian Taxation system Financial Markets 2 Learning Objectives Describe what...

please help me in 70 dollars to do this assignment iin APA style referencing Topic 1 & 2 Introduction to financial management and the Australian Taxation system Financial Markets 2 Learning...

Assume the following account balances at January 1, 2019, for Bioplast Jewelry, Inc.: Accounts Payable (control account) $ 6,600 Accounts PayableEvans Enterprises 1,600 Accounts PayableStamos...

ACME CO. HAS A CONTRACT TO PROVIDE A RETAILER WITH TWO MODELS OF DOODADS: 30,000 OF MODEL A AND 15,000 OF MODEL B. PRODUCTION CAPABILITY IS LIMITED AS INDICATED IN THE TABLE BELOW. COST TO MAKE MODEL...

Uperating income was positive for all months in the fiscal year. The company's sales follow a predictable trend, with sales always being higher in warmer months during the year. 4 . Which of the...

Octagon Wholesalers uses a perpetual inventory system. Refer to the data in E5-2 regarding sales transactions with Stellar Stores and to the additional information below for Octagon. Mar. 1 Octagon's...

Chapter 9 Adjusting and Closing Entries for Governmental Activities, Government-wide Level; Preparation of Government-wide and Major Fund Financial Statements a. Prior to preparing financial...

Grantham Roses has been in the business of growing rosebush starter plants for 50 years. Its rose bushes are started in greenhouses in British Columbia and shipped across North America every spring...

Stellar Stores is a new company that started operations on March 1, 2017. The company has decided to use a perpetual inventory system. The following purchase transactions occurred in March: Mar. 1...

Multiple Choice Questions 1. Which of the following is expensed under the principle of systematic and rational allocation? a. Salespeoples monthly salaries b. Insurance premiums c. Transportation to...

Explain the key activities and objectives associated with the third phase of a mining project cycle.

Find the future values of these ordinary annuities. Compounding occurs once a year. a. $500 per year for 8 years at 14% b. $250 per year for 4 years at 7% c. $700 per year for 4 years at 0% d. Rework...

Assume that it is now January 1, 2017. Wayne-Martin Electric Inc. (WME) has developed a solar panel capable of generating 200% more electricity than any other solar panel currently on the market. As...

Assume the following relationships for the Caulder Corp.: Sales/Total assets ....................................... 1.3 Return on assets (ROA) .............................. 4.0% Return on equity...

=+24. One of the assumptions underlying the theory of control charts (see Chapter 6) is that the successive points plotted on a chart are independent of one another. Each point plotted on a control...

=+a. What is the probability that at least one of ten points on a control chart signals a problem with a manufacturing process when in fact the process is running correctly?

=+b. Suppose you are told the selected review was submitted in Word format. What is the probability that the review was medium in length?