ACI wishes to determine the required return on asset
A, which has a beta of 1.5....
ACI wishes to determine the required return on asset
A, which has a beta of 1.5. The risk-free rate of return is 9%; the
return on the market portfolio of assets is 4%.
BETA AND REQUIRED RATE OF RETURN
a. A stock has a required return of 9%; the risk-free rate is
5%; and the market risk premium is 3%. What is the stock's beta?
Round your answer to two decimal places.
b. If the market risk premium increased to 10%, what would
happen to the stock's required rate of return? Assume that the
risk-free rate and the beta remain unchanged. If the stock's beta
is equal to 1.0, then the change in...
A stock has an expected return of 0.08, its beta is 1.5, and the
expected return on the market is 0.1. What must the risk-free rate
be? (Hint: Use CAPM) Enter the answer in 4 decimals e.g.
0.0123.
Beta and required rate of return
A stock has a required return of 12%; the risk-free rate is
2.5%; and the market risk premium is 3%.
What is the stock's beta? Round your answer to two decimal
places.
B. If the market risk premium increased to 9%, what would happen
to the stock's required rate of return? Assume that the risk-free
rate and the beta remain unchanged.
1. If the stock's beta is equal to 1.0, then the change in...
Stock A has a beta of 1.5 and an expected return of 10%. Stock B
has a beta of 1.1 and an expected return of 8%. The current market
price for stock A is $20 and the current market price for stock B
is $30. The expected return for the market is 7.5%. (assume the
risk free asset is a T-bill).
8- What is the risk free rate?
A) 0.25%
B) 1.25%
C) 2.00%
D) 2.50%
E) None of the...
A stock has an expected return of 12.66 percent. The beta of the
stock is 1.5 and the risk-free rate is 5 percent. What is the
market risk premium? (Answer in a percentage, but do not include
the % sign and round to two decimal places, i.e., 18.35)
Stock A has a beta of 1.5, the risk-free rate is 4% and the
return on the market is 9%. If inflation changes by -2%, by how
much will the required return on Stock A change?
Stock J has a beta of 1.5 and an expected return of 15%, while
Stock K has a beta of .75 and an expected return of 9%. You want a
portfolio with the same risk as the market. What is the expected
return of your portfolio?Group of answer choices10 percent11 percent12 percent13 percent14 percent
A stock has a beta of 1.5. The market's expected total return is
10% pa and the risk free rate is 5% pa, both given as effective
annual rates. In the last 5 minutes, bad economic news was released
showing a higher chance of recession. Over this time the share
market fell by 1%. The risk free rate was unchanged. What do you
think was the stock's historical return over the last 5 minutes,
given as an effective 5 minute...
A company has a beta of 1.5. The risk-free rate of return is 5
percent and the market risk premium is 6 percent. Find the required
rate of return on the stock (i.e., the cost of equity
capital).
b) The firm will pay a dividend of $4.00 per share next year. The
firm will increase the dividend payment by $0.50 a share every year
for the next 5 years (i.e., years 2 to 6). Thereafter, the
dividends are expected to...
Consider a single factor APT. Portfolio A has a beta of 1.5 and
an expected return of 24%. Portfolio B has a beta of 0.9 and an
expected return of 13%. The risk-free rate of return is 4%. An
arbitrage portfolio in which you take a position in a combination
of the highest beta portfolio and the risk-free asset, and an
opposite position in the other risky portfolio would generate a
rate of return of ______%.