What is the expected return of a stock if the risk-free rate is 3.4 percent, the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
What is the expected return of a stock if the risk-free rate is 3.4 percent, the stock's beta is 1.9, and the market risk premium is 8 percent? Answer in percent to 2 decimal places and do not include the % sign. For example, if the return is 2.04%, you should enter 2.04 as the answer. What is the expected return of a stock if the risk-free rate is 3.4 percent, the stock's beta is 1.9, and the market risk premium is 8 percent? Answer in percent to 2 decimal places and do not include the % sign. For example, if the return is 2.04%, you should enter 2.04 as the answer.
Expert Answer:
Answer rating: 100% (QA)
To calculate the expected return of a stock using the Capital Asset Pric... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324302691
11th edition
Authors: Eugene F. Brigham, ? Joel F. Houston
Posted Date:
Students also viewed these finance questions
-
1. Security A has expected return of 17.6% and beta of 1.4. If the risk-free rate is 6%, what is the reward-to-risk rate for Security A? Question 2 The common stock of Detroit Engines has a beta of...
-
Ques 1: What is the major complaint by firms concerning the Sarbanes-Oxley act of 2012? A. the legislative maximum allowable compensation for a CEO. B. the legal requirement to disclose project...
-
1). There are three securities in the market. The following chart shows their possible payoffs: State - Probability of Outcome -Return on Security 1 - Return on Security 2 - Return on Security 3 1...
-
The General Auditors Office (GAO) of ABC jurisdiction issued a report on the XYZ Electric Cooperative, a large member-owned utility. This report reviewed the work of MNO Consulting. MNO found...
-
Mark Sellers, a hedge fund manager with Sellers Capital in Chicago, wrote a piece in the Financial Times on September 9, 2006, arguing that Home Depot, the warehouse retailer, was worth $50 per...
-
In Exercises 2729, divide using long division. (4x 4 + 6x 3 + 3x - 1) , (2x 2 + 1)
-
On June 28, 1997, in Las Vegas, heavyweight boxers Mike Tyson and Evander Holyfield met for what proved to be a night to remember. During the third round of the fight, a desperate Tyson illegally bit...
-
Kieschnick Company has a balance in its Accounts Receivable control account of $10,000 on January 1, 2014. The subsidiary ledger contains three accounts: Bixler Company, balance $4,000; Cuddyer...
-
rephrase. PT IS WIDOWED AND ORIGINALLY FROM GERMANY. PT SPOUSE DIED 4 YEARS AGO AND PCG REPORTED SHE HAS STUGGLED WITH ANXIETY AND DEPRESSION EVER SINCE. PT HAS 2 ADULT CHILDRE THAT ARE VERY INVOLVED...
-
Two identical particles, each having charge #q, are fixed in space and separated by a distance d. A third point charge -Q is free to move and lies initially at rest on the perpendicular bisector of...
-
The geometric distribution is used in calculating the probability that an event A (having probability p) will occur after x - 1 trials in which A does not occur. Therefore, the distribution is given...
-
The E-mini S&P 500 futures contract is one-fifth the size of the standard futures contract and can be traded on the 24-hour CME Globex electronic trading system. What might be some of the advantages...
-
If a climate change analyst applies a discount rate of 2 percent to losses expected in 300 years time, how much, per $1 of expected loss, might she be willing to spend today to avoid those losses?...
-
If the U.S. dollarBritish pound exchange rate is $1.30 per pound, and the U.S. dollareuro rate is $1.12 per euro: a. What is the pound-per-euro rate? b. How could you profit if the pound-per-euro...
-
Suppose an investment pays off $800 or $1,600 with equal probability per $1,000 invested. What is the maximum leverage ratio you could have and still have enough to repay the loan in the event the...
-
The efforts of Public Communications Inc., to implement total quality had exceeded expectations at two of its three plants. However, the third plant just didnt seem to be able to get things off the...
-
Imole of an ideal constant calulan K gas pressure from 0.c work done (J) heated at to 100-(
-
Express mass density in kg/m3 and weight density in lb/ft3. 1. Find the mass density of a chunk of rock of mass 215 g that displaces a volume of 75.0 cm3 of water. 2. A block of wood is 55.9 in. x...
-
Now to see how XOMs P/E ratio has varied over timereturn back to the COMPANY OVERVIEW page. Next click FINANCIALSGROWTH RATIOS and then select WORLDSCOPEINCOME STATEMENT RATIOS. Is XOMs current P/E...
-
Trivoli Industries plans to issue a $100 par perpetual preferred stock with an 11 percent dividend. It is currently selling for $97.00, but flotation costs will be 5 percent of the market price, so...
-
Refer to Problem 17-1. What would the additional funds needed be if the companys year-end 2005 assets had been $4 million? Assume that all other numbers are the same. Why is this AFN different from...
-
The city health inspector wishes to determine the mean bacteria count per liter of water at a popular city beach. Assume the number of bacteria per liter of water is normal with mean and standard...
-
An engineer takes a sample of 5 steel I beams from a batch, and measures the amount they sag under a standard load. The amounts in \(\mathrm{mm}\) are: It is known that the sag is normal( \({ }^{2}\)...
-
The standard process for making a polymer has mean yield \(35 \%\). A chemical engineer has developed a modified process. He runs the process on 10 batches and measures the yield (in percent) for...
Study smarter with the SolutionInn App