Question: What is the pricing model that describes the expected return as the sum of the risk-free rate of interest and a premium for bearing market

What is the pricing model that describes the expected return as the sum of the risk-free rate of interest and a premium for bearing market risk?

A. Fama-French model

B. Economic value added

C. Arbitrage pricing theory

D. Capital asset pricing model

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!

Q:

A 5 year bond with annual coupon payments of 6 % is selling at 8 2 . 5 0 % of par value. What is its yield to maturity?: * a . 6 . 0 % b . 1 0 . 7 % c . 1 2 . 0 % d . 1 7 . 5 % A US exporter is due...

Q:

(15 points) You decide that you want to add a bank stock to the investment portfolio you are overseeing. The figures below show plots of monthly rates of return on three banking stocks (vertical...

Q:

The figures below show plots of monthly rates of return on three stocks versus those of the market Index. The beta and standard devlation of each stock is given beside the plot. a. Which stock is...

Q:

The figures below show plots of monthly rates of return on three stocks versus those of the market index. The beta and standard deviation of each stock is given beside the plot. Which stock is safest...

Q:

The figures below show plots of monthly rates of return on three stocks versus those of the market index. The beta and standard deviation of each stock is given beside the plot. a. Which stock is...

Q:

The figures below show plots of monthly rates of return on three stocks versus those of the market index. The beta and standard deviation of each stock is given beside the plot. Which stock is safest...

Q:

The figures below show plots of monthly rates of return on three stocks versus those of the market index. The beta and standard deviation of each stock is given beside the plot. Which stock is safest...

Q:

Which stock is safest for a diversified investor? Which stock is safest for an undiversified investor who puts all her money in one of these stocks? Consider a portfolio with equal investments in...

Q:

A stock has a beta of 0.8. Using the Capital Asset Pricing Model what is the expected return of the stock if the risk-free rate is 4% and the expected risk premium on the market is 8%?

Q:

Currently, you own a portfolio comprised of the following three stocks. Based on the Capital Asset Pricing Model, what is the expected return for your portfolio if the risk-free rate is 3% and the...

Q:

The structure shown in Fig. P8 consists of three cylindrical support posts to which an elliptical flat plate sign is attached. Estimate the drag on the structure when a 50-mph wind blows against it....

Q:

You have just purchased a car and taken out a $50,000 loan. The loan has a five-year term with monthly payments and an APR of 6%. a. How much will you pay in interest, and how much will you pay in...

Q:

Question Content Area Bobbi and Stuart are partners. The partnership capital of Bobbi is $ 3 8 , 6 0 0 and that of Stuart is $ 8 3 , 6 0 0 . Bobbi sells his interest in the partnership to John for $...

Q:

5. Develop a scenario comparing two PH programs and involving the use of a CBA.

Q:

Identify the signs of sexual harassment and the ways it can be countered.

Q:

Explain the outline of the legislation relating to equal opportunities.

Q:

Identify the importance of specialised training and learning arrangements such as action learning, induction and sales training.