Q: Suppose the risk-free rate is 5.1 percent and the market portfolio has an expected return of 11.8…
A: Standard deviation of market portfolio and portfolio Z is calculated. Then covariance and beta of…
Q: Assume that the risk free rate is currently 3% and that the market retunr is currently 11%.…
A: The market risk premium and required return for securities can be calculated with the help of CAPM…
Q: Assume that the short-term risk-free rate is 3%, the market index S&P500 is expected to pay returns…
A: To calculate expected return CAPM is used. CAPM stands for capital asset pricing model.
Q: beta and expected return
A: : Beta refers to the measurement of stock movement in relation to the overall market. A beta greater…
Q: Suppose the risk free rate (rfr) = 5%, average market return (rm) = 10%, and the required or…
A: In the given question we have two parts: In the first part we need to calculate the Beta of TNG In…
Q: Asset P has a beta of 0.9. The risk-free rate of return is 8 percent, while the return on the market…
A: The asset required rate of return can be calculated with the help of CAPM equation
Q: The current risk-free rate of return, rRF, is 4 percent and the market risk premium, RPM, is 8…
A: The formula to calculate the required rate of return using CAPM is as follows:Return = Riskfree rate…
Q: s NOT correlated with the S&P500. Asset B pays on average 8%, also has standard deviation equal to…
A:
Q: a. Calculate the required rate of return for an asset that has a beta of 1.8, given a risk-free rate…
A: Given details are : Risk free rate = 5% Beta = 1.8 Market return = 10% From above details we need to…
Q: Asset Y has a beta of 1.2. The risk-free rate of return is 6 percent, while the return on the market…
A: In this question we need to compute the asset's market risk premium. We can solve this question…
Q: Asset W has an expected return of 21.3 percent and a beta of 2.05. If the risk-free rate is 3.5…
A: Following details are given to us in the question regarding Asset W : Expected Return (ER) = 21.3…
Q: What is kd of investment whose Beta is 1.4 and market premium is 8% while risk free rate is 5%?
A: Here kd of investment means cost of investment, therefore we need to calculate cost of investment…
Q: Suppose the current risk-free rate of return is 5 percent and the expected market risk premium is 7…
A: Risk free rate= 5% market risk premium = 7% beta = 2 Market Equity Risk Premium (MRP) = rm − rf…
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: What is the expected return for asset X if it has a beta of 1.5, the expected market return is 15…
A: The expected return for the asset can be calculated with the help of CAPM equation
Q: A portfolio has an average return of 14.4 percent, a standard deviation of 18.5 percent, and a beta…
A: The Sharpe ratio: The Sharpe ratio is one of the most commonly used measures to assess the…
Q: If the expected rate of return on AZNG is 12.72, its beta is 1.09 and the market risk premium is 8%,…
A: Given risk free rate = 6.00%beta =1.090Return of stock =12.72%Market risk premium = 8.00%
Q: If the market portfolio has a required return of 0.12 and a standard deviation of 0.40, and the…
A: Security market line (SML): The security market line (SML) is the graphic depiction of the Capital…
Q: Assume the risk free rate is 3.9% and the expected return on the market is 13%. Based on the CAPM,…
A: Given details are : Risk free rate (Rf) = 3.9% Expected market return (Rm) = 13% Beta = 1.25 From…
Q: what is the slope of the best feasible CAL?
A: Sharpe ratio is the measure of risk with return adjusted on a portfolio. A higher portfolio is…
Q: Suppose that the returns on an investment are normally distributed with an expected return of 16%…
A: Z score = (Observed value - mean) / standard deviation Z score = (19%-16%) / 3% Z score = 3%/3% Z…
Q: Consider a portfolio exhibiting an expected return of 6% in an economy where the riskless interest…
A: Given, Expected return = 6% Risk less interest rate = 1% Expected return on market portfolio = 10%…
Q: The risk-free rate and the expected market rate of return are 6% and 16%, respectively. According to…
A: In the above question we need to calculate the Expected rate of return of stock where, Risk free…
Q: If the market portfolio has a required return of 0.12 and a standard deviation of 0.40, and the…
A: SML is an abbreviation used for security market line. It represent the market equilibrium and its…
Q: A portfolio has a correlation of 0.40 with the overall market and produces a Sharpe Ratio of 0.2. If…
A: There are different measures which are used for the estimation of portfolio performance. One such…
Q: Use the following information: ElrXOM E[TMS)=29.7%, standard deviationMS = 35.2% = 15.6%, standard…
A: Weight of XOM is 0.43 and weight of MS is 1-0.43= 0.57
Q: If the risk-free rate is 7 percent, the expected return on the market is 10 percent, and the…
A: Given that;Risk free rate is 7%Expected return on the market is 10%Expected return on the security…
Q: Security A has an expected return of 7%, a standard deviation of returns of 35%, a correlation…
A: To know the riskiness between the two projects, Coefficient of variation gives good results. Higher…
Q: Suppose that optimal risky portfolio has an expected return of 16% and a variance of 0.04. The…
A: CML shows the relationship between standard deviation of various investments and expected return by…
Q: Assume that the short-term risk-free rate is 3%, the market index S&P500 is expected to pay returns…
A: The question is based on the concept of capital asset pricing model (CAPM) , the model used to…
Q: Security X has an expected rate of return of 13% and a beta of 1.15. The risk-free rate is 5%, and…
A: In the given we need to analyze whether the security X is Under-valued or over-valued. For this we…
Q: The expected return on the Market Portfolio M is E(RM)=15%, the standard deviation is sM=25% and the…
A: A portfolio is the combination of various financial assets in which an investor (or individual) has…
Q: Asset A has an expected return of 20% and a standard deviation of 25%. The risk free rate is 10%.…
A: Expected Return 20% Standard Deviation 25% Risk Free Rate of Return 10% Find - Reward…
Q: Conglomco has a beta of 0.32. If the market return is expected to be 12 percent and the risk-free…
A: Following details are given to us in the question : Beta (B) = 0.32 Market Return = 12% Risk free…
Q: Assume that Rf = 6 percent and the market risk %3D premium (Km - Rf) is 7.0 percent. Compute Kj for…
A: Given details are : Rf = Risk free rate = 6% (Km - Rf) = Market risk premium = 7.0% Beta = 1.9 From…
Q: Robotics stock's required return is 12.6%, the risk-free rate of return is 2.15%, and the market…
A: Required rate = 12.6% Risk free rate = 2.15% Market risk premium = 8%
Q: The risk-free rate is 10% and expected rate of return is 18%. The beta is 12 and standard deviation…
A: Sharpe ratio refers to the financial indicator of the performance of the fund (or security) in terms…
Q: If the beta of Asset A is 2.2, the risk free rate is 2.5%, and the expected return on Asset A is 8%,…
A: Expected return on market refers to the money that is invested for expecting to make an investment…
Q: Your portfolio has a beta of 1.73, a standard deviation of 29 percent, and an expected return of…
A: Treynor ratio = Portfolio Return - Risk Free ReturnPortfolio Beta
Q: Two stocks, A and B, have beta coefficients of 0.8 and 1.4, respectively. If the expected return on…
A: The evaluation of the systematic risk or volatility of a stock or the portfolio as compared to the…
Q: Find the market return for an asset with a required return of 15.996% and a beta of 1.10 when the…
A: Given information: Required return = 15.996% Beta = 1.10 Risk free rate = 9%
Q: Suppose the market premium is 12%, market volatility is 20% and the risk-free rate is 6%. Suppose a…
A: Market risk premium (Mp) = 0.12 or 12% Risk free rate (Rf) = 0.06 or 6% Beta (b) = 0.8 Expected…
Q: What is the expected risk-free rate of return if Asset X, with a beta of 1.5, has an expected return…
A: Required return = risk free rate + beta * market retrun - beta* risk free rate
Q: Given an expected market risk premium of 12.0%, a beta of 0.75 for Benson Industries, and a…
A: The capital asset pricing model is the model of valuing the minimum required rate of return an…
Q: Suppose the risk-free rate is 4.2 percent and the market portfolio has an expected return of 10.9…
A: Capital asset pricing model is the most efficient model to calculate the expected rate of return of…
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- APT An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The risk-free rate is 6%, the expected return on the first factor (r1) is 12%, and the expected return on the second factor (r2) is 8%. If bi1 = 0.7 and bi2 = 0.9, what is Crisp’s required return?Security A has an expected return of 7%, a standard deviation of returns of 35%, a correlation coefficient with the market of −0.3, and a beta coefficient of −1.5. Security B has an expected return of 12%, a standard deviation of returns of 10%, a correlation with the market of 0.7, and a beta coefficient of 1.0. Which security is riskier? Why?Assume that the risk-free rate, RF, is currently 9% and that the market return, rm, is currently 16%. a. Calculate the market risk premium. b. Given the previous data, calculate the required return on asset A having a beta of 0.4 and asset B having a beta of 1.8.
- If X-Co has a Beta of 1.6, and the risk-free rate is 4.5%, and the average market risk premium is 6%, what is X-Co’s estimated required return per the CAPM? (show calculations)Suppose the beta of PetrolCom is 0.75, the risk - free rate is 3 percent, and the market risk premium is II percent. Calculate the expected rate of return on PertrolCom.What is the required return for asset X if it has a beta of 1.5, the expected market return is 15 percent, and the expected risk-free rate is 5 percent?
- If the market return is 10%, the expected return from SBI is 16 %, and the alpha of the SBI is 2%, beta of SBI with market as per Sharpe's Single Index Model is a. 1.0 b. 0.75 c. 1.4 d. 1.25What is the expected return for asset X if it has a beta of 1.5, the expected market return is 15 percent, and the expected risk-free rate is 5 percent?Asset P has a beta of 0.9. The risk-free rate of return is 8 percent, while the return on the market portfolio of assets is 14 percent. The asset's required rate of return is
- Asset Y has a beta of 1.2. The risk-free rate of return is 6 percent, while the return on the market portfolio of assets is 12 percent. The asset's market risk premium isWhat is the beta of IsoTech, given that the covariance between IsoTech and the market is 0.1 and the standard deviation of market returns is 51%?An asset has a beta of 0.9, The variance of returns on a market index, cr#, is 90. If the variance of returns for the asset is 120, what proportion of the asset's total risk is systematic, and what proportion is residual risk?