Question: The expected return on JK stock is 13.40 percent while the expected return on the market is 10.8 percent. The beta of JK stock is

The expected return on JK stock is 13.40 percent while the expected return on the market is 10.8 percent. The beta of JK stock is 1.4. What is the risk-free rate of return?

Step by Step Solution

★★★★★

3.49 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Expected return on stock 1340 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

Document Format (1 attachment)

68-B-F-F-M (2289).xlsx

300 KBs Excel File

Students Have Also Explored These Related Finance Questions!

The expected return on a stock is 15% compounded continuously. The continuously compounded risk-free interest rate is 7% and the call elasticity on this stock is 4:5. Find the expected annual...

The expected return on the market is 12% and the risk-free rate is 7%. The standard deviation of the return on the market is 15%. One investor creates a portfolio on the efficient frontier with an...

The expected return on the market portfolio is 15 percent, and the return on the risk-free security is 5 percent. What is the expected return on a portfolio with a beta equal to 0.5?

please answer all questions completely using multiple choice. A portfolio comprises Coke (beta of 1.6) and Wal-Mart (beta of 0.6). The amount invested in Coke is $10,000 and in Wal-Mart is $20,000....

The expected return on JK stock is 1 5 . 8 0 percent while the expected return on the market is 1 1 . 3 4 percent. The stock's beta is 1 . 5 0 . What is the risk - free rate of return? The expected...

The expected return on JK stock is 13.60 percent while the expected return on the market is 11.0 percent. The beta of JK stock is 1.4. What is the risk-free rate of return? 3.40 percent 4.00 percent...

Question 12 1 Point 12.6 The expected return on JK stock is 11 percent while the expected return on the market is 9.1 percent. The stock's beta is 1.4. What is the risk-free rate of return? Only...

Grand Adventure Properties offers a 9 . 5 percent coupon bond with annual payments. The yield to maturity is 1 1 . 2 percent and the bond matures 1 0 years from today. What the market price of this...

The expected return on JK stock is 16.28 percent while the expected return on the market is 11.97 percent. The stock's beta is 1.63. What is the risk-free rate of return? Multiple Choice 2.22 percent...

The expected return on JK stock is 16.28 percent while the expected return on the market is 11.97 percent. The stock's beta is 1.63. What is the risk-free rate of return? Group of answer choices 2.42...

Explain the rationale behind the NPV method in your own words. Why is a higher NPV conceptually better than a lower one?

4. Let T be a nonempty subset of the interval (0, 1). If every finite subset {x1,x2,...,n} of T (with no two of r1, 12,..., In equal) has the property that r+3++

To be successful in a cmil action under Section it of the Securnies Act of 1 9 9 3 against audiors for liabiry for a materially musstated registration statement, the plaintiff mert preve which of the...

During the financial crisis of 2007-2009, the Federal Reserve took many extraordinary measures to support the economy. As the economy recovers, what actions might the Fed take to tighten financial...

Financial information is presented below for three different companies. InstructionsDetermine the missingamounts. Natural Mattar Allied Cosmetics Grocery Wholesalers Sales $90,000 (e) $144.000 (a)...

The trial balance of G. Durler Company at the end of its fiscal year, August 31, 2010, includes these accounts: Merchandise Inventory $17,200; Purchases $149,000; Sales $190,000; Freight-in $4,000;...

On January 1, 2010, Rachael Ray Corporation had merchandise inventory of $50,000. At December 31, 2010, Rachael Ray had the following account balances. Freight-in........... $ 4,000...

RAK Co. wants to issue new 15-year bonds for some much-needed expansion projects. The company currently has 7 percent coupon bonds on the market that sell for $1,060, make semiannual payments, and...

Constant growth Your broker offers to sell you some shares of Bahnsen & Co. common stock that paid a dividend of $2.00 yesterday. Bahnsen's dividend is expected to grow at 7% per year for the next 3...

Assuming the following cash flows and a required rate of return of 1 1 % , should this project be accepted ( based on your previous calculations ) ? Explain in detail. e Syllabus es sions Type your...