According to the CAPM, what is the market risk premium given an expected return on a security of 13.6%, a stock beta of 1.2, and a risk-free interest rate of 4%?
Q: A stock has a beta of 1.19 and an expected return of 11.27 percent. If the risk-free rate is 3.4…
A: Given: Beta = 1.19 Expected return = 11.27% Risk free rate = 3.4%
Q: Suppose the risk-free return is 4.1% and the market portfolio has an expected return of 9.3% and a…
A: In CAPM; Capital Asset Pricing Model, the expected return for a single stock is ascertained by…
Q: Industry stock has a beta of 1.8, the risk-free rate is 4.40%, and the market risk premium (MRP) is…
A: CAPM stands for Capital Asset Pricing Model which indicates the relation between the expected…
Q: Using CAPM A stock has an expected return of 13 percent, the risk-free rate is 4.5 percent, and the…
A: Given details are : Expected return = 13% Risk free rate = 4.5% Market risk premium = 7% We need to…
Q: The current risk-free rate of return, rRF, is 2 percent and the market risk premium, RPM, is 8…
A: Risk free rate = 2% Marker risk premium = 8% Beta = 1.40
Q: Suppose the risk-free return is 4.0% and the market portfolio has an expected return of 10.0% and a…
A: Expected return can be calculated by using CAPM equation given below Expected return =Risk free…
Q: A stock has an expected return of 11 percent, the risk-free rate is 6.1 percent, and the market risk…
A: Beta: The volatility of a stock in relation to the entire market is measured by its beta. Individual…
Q: A stock has an expected return of 15 percent, its beta is 0.9, and the risk-free rate is 6 percent.…
A: Given the following information: Expected return on stock (r) = 15% Beta (b) = 0.9 Risk free rate…
Q: The risk free rate is 5% and the expected return on the market portfolio is 13%. A stock has a beta…
A: The expected return is the return that the individual expected to gain in the investment over the…
Q: Suppose the risk-free return is 7.9% and the market portfolio has an expected return of 11.5% and a…
A: Risk free rate = 7.9% Stock beta = 0.77 Market return = 11.5%
Q: A stock has an expected return of 13.1 percent, its beta is 1.70 and the risk free premium rate is…
A: Risk market return is used in CAPM model to calculate expected return on the stock and it is also…
Q: The current risk-free rate of return is 2.5 percent and the market risk premium is 5 percent. If the…
A: The return which the investors are expected in order to invest in specific securities is referred to…
Q: Assuming that the CAPM approach is appropriate, compute the required rate of return for each of the…
A: Given: Risk free rate = 0.07 Market rate = 0.13 Different betas:
Q: A portfolio has a beta of 1.2 and an actual return of 14.1 percent. The risk-free rate is 3.5…
A: Given: Beta = 1.2 Actual return = 14.1% Risk free rate = 3.5% Market risk premium = 7.4%
Q: According to the CAPM, what is the expected market return given an expected return on a security of…
A: Details given are : Expected return on security = 15.8% Beta = 1.2 Risk free rate (Rf) = 5% We need…
Q: If the risk free rate is 2 %, the expected return on the market portfolio is 12% and the beta of…
A: Financial management consists of directing, planning, organizing and controlling of financial…
Q: A stock has an expected return of 13.1 percent, a beta of 1.28, and the expected return on the…
A: Given details are : Expected return on stock = 13.1% Beta = 1.28 Expected market return (Rm) = 11%…
Q: Given that the formula for CAPM is Expected return= risk free rate + Beta*(Return on market - risk…
A: CAPM is a model used to determine a theoretical appropriate required rate of return of the asset.
Q: If the expected return on the market is 16%, then using the historical risk premium on large stocks…
A: In the given problem we require to calculate the risk free rate from following details: Expected…
Q: A stock has an expected return of 13.4 percent, its beta is 1.60, and the risk-free rate is 5.5…
A: We require to compute the expected market return (Rm) from following details : Expected return on…
Q: A stock has an expected return of 14.1 percent, a beta of 1.8, and the return on the market is 9.8…
A: Expected return (Re) = 14.1% Beta (B) = 1.8 Market return (Rm) = 9.8% Risk free rate = Rf
Q: Suppose MegaChip has a beta of 1.3, whereas Littlewing stock has a beta of .7. If the risk-free…
A: Given the following information: Beta of MegaChip: 1.3 Beta of Littlewing: 0.7 Risk free rate: 4%…
Q: According to the CAPM, what is the required rate of return for a stock with a beta of 0.7, when the…
A: To calculate the required rate of return we use the below formula Required rate of return = Risk…
Q: A stock has an expected return of 13.2 percent, the risk-free rate is 3.5 percent, and the market…
A: According to capital asset pricing model: rs=rf+beta×rm-rfwhere,rs=expected returnrm-rf=market risk…
Q: Consider the CAPM. The expected return on the market is 18%. The expected return on a stock with a…
A: We are given following details : Expected return on market = 18% Beta = 1.2 Expected return on stock…
Q: Suppose the expected return for the market portfolio and risk-free rate are 13 percent and 3 percent…
A: Treynor ratio = (Expected return - Risk free rate) / BetaTreynor ratio of the market = (Expected…
Q: A stock has an expected return of 13.5 percent, its beta is 1.16, and the expected return on the…
A: Expected return = 13.5% Beta = 1.16 Market return = 12.50%
Q: If the expected return from the market is 18%, the risk-free rate is 11%, and the beta of Loschert…
A: The term beta of a stock represents the responsiveness of a particular stock in relation to the…
Q: Given the following information, use the CAPM to calculate the beta of the stock. The required rate…
A: Capital Asset Pricing Model CAPM model shows the relationship between the expected return and risk…
Q: A stock has an expected return of 14 percent, its beta is 1.45, and the expected return on the…
A: In this question we need to compute the risk free rate. We can solve this question using CAPM…
Q: A stock has an expected return of 9.9 percent, the risk-free rate is 1.8 percent, and the market…
A: Expected return = 9.9% Risk free rate = 1.8% Market risk premium = 4.3%
Q: If the risk free rate is 2 9%, the expected return on the market portfolio is 1296 and the beta of…
A: Financial statements are statements which states the business activities performed by the company .…
Q: Consider the CAPM. The risk-free rate is 6%, and the expected return on the market is 18%. What is…
A: In the given question we need to calculate the expected return on a stock using CAPM i.e. Capital…
Q: A stock has an expected return of 13.6 percent, the risk-free rate is 3.7 percent, and the market…
A: In the above question we require to compute the expected beta of the stock. This question can be…
Q: Suppose the risk-free return is 4.5% and the market portfolio has an expected return of 10.3% and a…
A: According to the market scenario, the stock prices are keep on changing with the changing market…
Q: What is the expected return for ABC Stock if the risk-free rate is 3.0%, the market risk premium is…
A: The mathematical representation of the formula is:
Q: ected return for a stock with a beta equal to 0.50? - What is the marke
A: Given information :
Q: A stock has an expected return of 11.0%, its beta is 0.95, and the risk-free rate is 6.00%. What…
A: In the given question we require to calculate the expected return on market from following details:…
Q: The risk-free rate of return is 4 percent and the market risk premium is 8 percent. What is the…
A: In given question we need to compute the expected rate of return for stock.
Q: Assume that the current risk-free rate is 14%, and that we expect the return on the GSE Composite…
A: In the given question we need to calculate the systematic risk of MTN shares i.e. we need to…
Q: A stock has an expected return of 11.25 percent, a beta of 0.82, and the expected return on the…
A: Capital asset pricing model is used to compute the expected return from a stock: Here, Expected…
Q: What is the expected return on a stock with a beta of .8, given a risk-free rate of 3.5% and an…
A: In this question we need to compute the expected return on stock. This question can be solved using…
Q: A stock has a beta of 1.23, the expected return on the market is 11.9 percent, and the risk-free…
A: the expected return on this stock = risk free rate + beta*market risk premium
Q: A stock has a beta of 0.7 and an expected return of 7.3 percent. If the risk-free rate is 1.3…
A: Beta = 0.7 Expected return = 7.3% Risk free rate = 1.3%
Q: A stock has an expected return of 12.7 percent and a beta of 1.18, and the expected return on the…
A: Given information: Expected return is 12.7% Beta value is 1.18 Expected return on market is 11.7%
Q: Using CAPM A stock has beta of 1.04, the expected return on the market is 10 percent, and the…
A: The expected return is the minimum required rate of return which an investor required from the…
Market risk premium
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- What is the stand-alone risk? Use the scenario data to calculate the standard deviation of the bonds return for the next year.You have observed the following returns over time: Assume that the risk-free rate is 6% and the market risk premium is 5%. What are the betas of Stocks X and Y? What are the required rates of return on Stocks X and Y? What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y?An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 3.2%, and the return on the HML portfolio (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = 20.4, and di = 1.3, what is the stock’s predicted return?
- According to the CAPM, what is the expected return on a security given market risk premium of 13%, a stock beta of 1.77, and a risk free interest rate of 2%? Put the answer in decimal place.For the upcoming year, the risk-free rate is 2 percent, and the expected return to the market is 7 percent. You are also given the following covariance matrix for Securities J,K, andL. \table[[Covariance,Security J,Security K,Security L],[Security J,0.0012532,0.0010344,0.0019711],[Security K,0.0010344,0.0023717,0.0013558],[Security L,0.0019711,0.0013558,0.0048442]] Also assume that you form a portfolio by putting 0 percent of your funds in Security J, 40 percent of your funds in Security K, and 60 percent of your funds in Security L. Based on this information, determine the standard deviation of the resulting portfolio. ◻ 6.47% 5.27% 4.98% 5.82% 4.77%Suppose the expected return for the market portfolio and risk-free rate are 13 percent and 3 percent respectively. Stocks A, B, and C have Treynor measures of 0.24, 0.16, and 0.11, respectively. Based on this information, an investor should ______?
- Security A has a beta of 1.16 and an expected return of .1137 and Security B has a beta of .92 and expected return of .0984 - these securities are assumed to be correctly priced. Based on CAPM, what is the return on the market?Stock M has a relevant risk equals 1.75, and unsystematic risk equals 2. If the real risk-free rate of interest equals 3 percent, inflation premium equals 2 percent, expected market return equals 11 percent, and the required rate of return on a portfolio consisting of all stocks, which is the market portfolio equals 11 percent, what is Stock M's required rate of return? Interpret your answer.The following below are the expected return and betas of the given set of securities. Given that the risk free rate is 7% and the market return is 13%. Security N O P Return 20 21 23 Beta 1.2 1.8 0.82 Calculate the market risk premium, and the expected return of each asset using CAPM.
- Given that the formula for CAPM is Expected return= risk free rate + Beta*(Return on market - risk free rate), Security A has a beta of 1.16 and an expected return of .1137 and Security B has a beta of .92 and expected return of .0984. If these securities are assumed to be correctly priced, what is their risk free rate? Based on CAPM, what is the return on the market?A stock has a beta of 0.7 and an expected return of 7.3 percent. If the risk-free rate is 1.3 percent, what is the market risk premium?A stock has an expected return of 12.7 percent and a beta of 1.18, and the expected return on the market is 11.7 percent. What must the risk-free rate be?