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Use the following data to explore the risk-return relation and the concept of beta for Apple...

Use the following data to explore the risk-return relation and the concept of beta for Apple stock, Alphabet (Google) stock, and the S&P 500 market index:

Year

Apple Stock Price

Alphabet Stock Price

S&P 500 Market Index

2017

$174.09

$1,072.01

2,601.42

2016

$115.82

$807.80

2,238.83

2015

$105.26             

$765.84

2,043.94

2014

$113.99

$521.51

2,058.90

2013

$80.01

$559.76

1,848.36

2012

$72.80

$358.17

1,426.19

E) Calculate the expected return on the market according to: Expected Return on Market = Risk-Free Rate + Market Risk Premium. Also calculate the required return for Apple and Alphabet according to: Required Return = Risk-Free Rate + (Beta)(Market Risk Premium) (9 Points)

Expected return on the market: rm =
Apple Required Return =
Alphabet Required Return =
Market risk premium: RPM = 4.01%
Risk-free rate: rRF = 1.30%

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jeff jeffy answered 1 year ago
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