Question: The expected return for a stock calculated using the CAPM is 11.5%. The market return is 8.0% and the beta of the stock is 1.50.

The expected return for a stock calculated using the CAPM is 11.5%. The market return is 8.0% and the beta of the stock is 1.50. Calculate the implied risk-free rate (as a percentage).

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!

1. The expected return for a stock, calculated using the CAPM, is 10.5%. The market return is 9.5% and the beta of the stock is 1.50. Calculate the implied risk-free rate. 2. The expected return for...

The expected return for a stock, calculated using the CAPM, is 10.5%. The market return is 9.5% and the beta of the stock is 1.50. Calculate the implied risk-free rate

The expected return for a stock, calculated using the CAPM, is 8%. The market rate of return is 14% and the beta of the stock is 0.4 . Calculate the implied risk-free rate of return. 4.0% 0.3% 2.7%...

The expected return for Walmart stock, calculated using the CAPM, is 3.75%. The market return is 6.75% and the beta of the stock is 0.87. What is the implied risk-free rate

The expected return for Zbrite stock calculated using the CAPM is 15.5%. The risk free rate is 3.5% and the beta of the stock is 1.2. Calculate the implied market risk premium. i.e. Rm-Tr a. 5.5% b....

In a price weighted average stock market indicator series, the following type of stock has the greatest influence: the stock with the highest price. the stock with the lowest price. the stock with...

The expected return for a share calculated using the CAPM is 10.5%. The market return is 9.5% and the beta of the share is 1.50. Calculate the implied risk-free rate. hi just wondering how to do the...

1) The expected return for XYZ stock calculated using the CAPM is 13% and its beta is 1.5. The return on the market portfolio is 10%. Calculate the risk free rate Round intermediate steps and your...

The Expected return for a stock, calculated using the CAPM, is 13.5%. THe Risk-free rate is 7.5% and the beta of the stock is 0.80. Calculate the implied return on teh market. a) 7.50% b)13.91% c)...

The expected return for Westport stock calculated using the CAPM is 7.5%. The risk-free rate is 0.75% and the beta of the stock is 1.4. Calculate the implied market risk premium. Can a market be (1)...

The operating activities section of the statement of cash flows for General Motors Corporation is provided below for three recent years. A large expense for General Motors is its pension expense....

Old MacDonald produces hay. He has a single employee, Jack. If Jack works for x hours he can produce x bales of hay. Each bale of hay sells for $1. The cost to Jack of working x hours is c(x) =...

If the last tenant to survive receives full ownership of the property then the property was held as tenants in commonjoint tenants or tenants by the entirety . If property is held as tenants in...

Questions Q1. Write a Python program to retrieve the first and last colors from the following list: color_list = ["red", "green", "white", "blue", "black") Q2. Given the following dictionary,...

What are the graphics options available to communicate business data? [LO-3]

How does a synopsis differ from an executive summary? [LO-4]

Message Strategies: Informational Reports; collaboration: Team Projects [LO-1], Chapter 2 You and a classmate are helping Linda Moreno prepare her report on Electrovisions travel and entertainment...