an FIN 320Pearson EdAt the beginning of 2007 (the yoar the iPhone was introduced). Apple's beta was 1.3 and the risk-free rate was about 36% Apple's price was $82 29 Apple's priceat the end of 2007 was 5197.24. If you estimate the market risk promium to have been 5.7%, did Apple's managers exceed their investors' required returm as givenby the CAPM?The expected return is (Round to two decimal places)

Given, Apple beta = 1.3 Risk free rate = 3.6% Market risk premium = 5.7%

Al the beginning of 2007 (the year the Phone was introduced) Apple's beta was 1.3 and the risk-free rate was about 36% Apple's price was S82 29. Apple's price at the end of 2007 was $197 24. If you estimate the market risk premium to have been 57%, did Apple's managers exceed their investors' required return as given by the CAPM? The expected return iss (Round to two decimal places)

Al the beginning of 2007 (the year the Phone was introduced) Apple's beta was 1.3 and the risk-free rate was about 36% Apple's price was S82 29. Apple's price at the end of 2007 was $197 24. If you estimate the market risk premium to have been 57%, did Apple's managers exceed their investors' required return as given by the CAPM? The expected return iss (Round to two decimal places)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.3 and the risk-free rate was about 3.6%. Apple's price was $82.38. Apple's price at the end of 2007 was $192.92. If you estimate the market risk premium to have been 6.3%, did Apple's managers exceed their investors' required return as given by the CAPM? The expected return is? (Round percentage to 2 decimal places)
At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.3 and the risk-free rate was about 3.8%. Apple's price was $83.17. Apple's price at the end of 2007 was $197.84. If you estimate the market risk premium to have been 5.8%, did Apple's managers exceed their investors' required return as given by the CAPM?
At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.3 and the risk-free rate was about 4.5%. Apple's price was $82.72. Apple's price at the end of 2007 was $193.19. If you estimate the market risk premium to have been 6.3%, did Apple's managers exceed their investors' required return as given by the CAPM?
Dhofar Energy Services has a Beta = 1.04 The risk-free rate on a treasury bill is currently 4.4% and the cost of equity has 20.70%. What is the market return? Select one: a. 0.2007 b. 0.2088 c. 0.2402 d. All the given choices are not correct e. 1.1567
Dhofar Energy Services has a Beta = 1 The risk-free rate on a treasury bill is currently 4.4% and the cost of equity has 20.70%. What is the market return? Select one: a. 1.1630 b. 0.2070 c. 0.2480 d. 0.2070 e. All the given choices are not correct
Giambona Corporation's stock had a required return of 8.50% last year when the risk - free rate was 2.50% and the market risk premium was 4.00%. Then an increase in investor risk aversion caused the market risk premium to rise by 1% from 4.00% to 5.00 %. The risk - free rate and the firm's beta remain unchanged. What is the company's new required rate of return? a. 9.00% b. 9.50% c. 10.00% d10.30% e. 10.80%
Dhofar Packaging has a Beta = 1.8. The risk free rate on a treasury bill is currently 3.55% and the market return has averaged 22.85%.Calculate cost of equity Select one: a. 34.77% b. None c. 35% d. 38.29% e. 37.50%
Stock A is expected to return 14 percent in a normal economy and lose 21 percent in a recession. Stock B is expected to return 11 percent in a normal economy and 5 percent in a recession. The probability of the economy being normal is 75 percent with a 25 percent probability of a recession. What is the covariance of these two securities? A) .007006 B) .005180 C) .006274 D) .003938 (Don't Hand writing in solution) .
Engler Corporation's stock had a required return of 9.50% last year when the risk - free rate was 2.50% and the market risk premium was 5.00%. Then an increase in investor risk aversion caused the market risk premium to rise by 1% from 5.00% to 6.00%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? a. 10.40% b 10.90% с. 11.80% d. 12.50% e. 13.50%
The rate of return on U.S. T-bills is 3.25% and the expected return on the market is 9.50%. J&X, Inc. has a beta (b) of 1.48 Which of the following is most correct? J&X has less total risk than the average firm. J&X has more systematic, or market risk than the average firm. J&X has less non-diversifiable risk than the average firm. J&X has more total risk than the average firm.
Estimate the beta value of your company using CAPM model and check the adequacy of the model (Current US 3 month Treasury bill is 0.03%) Clarity as you have asked: THE RETURNS ARE NOT IN PERCENTAGE. They are just as they are S&P index Iron Inc -2.47567 1.5888 3.433569 1.747917 0.701043 1.115125 0.96953 2.20568 0.409803 0.37909 0.451845 0.842537 -0.01463 0.345743 -0.52576 -0.17227 1.072171 0.201313 0.222197 0.574076 0.759145 1.11301 1.318305 0.592719 -1.41573 -0.19641 0.220289 0.365459 0.137568 0.588253 0.848872 0.389854 -0.78469 0.527053 -0.14562 0.469088 1.554924 1.180992 0.859738 0.977212 0.089864 -1.58603 0.67762 0.901378 0.470848 -0.1895 -0.22245 -0.35259 -0.93571 -0.54436 0.067626 -0.0821 0.070904 -0.35606 1.289025 -1.62177 0.302398 0.139707 -0.26516 -1.5904 1.087871 -0.42531 0.149878…
d4) Assume that the MLIK100 Index at close of trading yesterday was 4,000 and the daily volatility of the index was estimated as 0.8% per day at that time. The parameters in a GJR GARCH model are ω = 0.000005, α = 0.08, = 0.04 and β = 0.92. Where is the asymmetry parameter. If the MLIK100 moves by 50 points by close of trading today, what will the new volatility estimate be, per day, if the move is an increase or a decrease?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS