Find the Expected Return on the Market Portfolio given that the Cost of Equity is 14% and Risk-Free Rate is 4% and the Beta for Stock Y is 2

Q: The Treasury bill rate is 4%, and the expected return on the market portfolio is 12%. Using the…

A: Risk free rate = 4% Market return = 12% Beta of stock X = 1.5

Q: The risk-free rate is 3.4 percent and the market expected return is 11.9 percent. What is the…

A: The expected return of a stock can be found out using the CAPM formula. Given, Rf = Risk free…

Q: Suppose the risk-free return is 4% and the market portfolio has an expected return of 10% and a…

A: Calculation of 3M's beta with respect to market: Beta of 3M is determined by multiplying the…

Q: A stock has an expected return of 6%. What is its beta? Assume the risk-free rate is 8% and the…

A: Given details: Expected return = 6% Risk free rate = 8% Expected Market Return = 18% From the above…

Q: Apex Roofing's stock has a beta of 1.50, its required return is 14.00%, and the risk-free rate is…

A: In the given question we need to compute the required rate of return on stock market from following…

Q: Assume that the risk-free rate of return is 46 and the market risk premium (Le, Rm-Re) is 8%. If use…

A: Financial management consists of directing, planning, organizing and controlling of financial…

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: ASsume the following data for a stock: Beta 15, risk-free rate = 4 percent, market rate of return 12…

A:

Q: The expected return for a stock, calculated using the CAPM is 13.5%. The risk free rate is 7.5% and…

A: In the given problem we are required to calculate the implied return on market using following…

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: Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the…

A: We require to calculate the Bell Weather Inc stock's required rate of return using CAPM from the…

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: JaiLai Cos. stock has a beta of 0.8, the current risk-free rate is 6.2 percent, and the expected…

A: The provided information are: Beta = 0.80 Expected return = 12% Risk free rate = 6.2%

Q: Alpha Company has a beta of 3.25 and a standard deviation of returns of 27%. The return on the…

A: In this question we require to calculate the risk premium on the market and also required rate of…

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: Beta and required rate of return A stock has a required return of 11 percent; the risk-free rate is…

A: In the given question we require to compute the beta of stock from below details : Required return =…

Q: A stock has a required return of 13%; the risk-free rate is 3%, and the market risk premium is 4%.…

A: In the given question we are require to calculate the Beta of stock We can calculate the Beta of…

Q: JaiLai Cos. stock has a beta of 0.8, the curret risk-free rate is 5.8 percent, and the expected…

A: Beta = 0.8 Risk free rate (Rf) = 5.8% Market return (Rm) = 14%

Q: Assume that the risk-free rate is 3% and the expected return on the market is 11%. What is the…

A: In the given question we are require to calculate the required rate of return on a stock. We can…

Q: What is the beta of a firm whose equity has an expected return of 21.3 percent when the risk - free…

A: Beta shows the systematic risk of the asset. The beta of the asset increases the expected rate of…

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: Assume that the risk-free rate is 6 percent and the expected return on the market is 13 percent.…

A: Given details are : Risk free rate (Rf) = 6% Expected return on market (Rm) = 13% Beta of stock =…

Q: Assume that the risk-free rate is 7.5% and the required return on the market is 13%. What is the…

A: In the Given Question we require to calculate the required rate of return on a stock using following…

Q: Adam wants to determine the required return on a stock portfolio with a beta coefficient of 0.5.…

A: Required rate of return = risk free rate + beta * (market return - risk free rate)

Q: Find the Risk Free Rate given the cost of equity 12%, the Expected Return on Market Portfolio is 16%…

A: Given: Expected return = 12% Market rate = 16% Beta = 0.6

Q: Assume that the risk-free rate is 7.7% and the market return is 10%. Calculate the expected rate of…

A: The required return is calculated using the CAPM model capital asset pricing model according to…

Q: what is the expected return on this stock

A: Capital Asset Pricing Model(CAPM) is a method used for finding the relationship between the…

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: JaiLai Cos. stock has a beta of 0.7, the current risk-free rate is 6.1 percent, and the expected…

A: CAPM model provides formula that calculates the expected return on stock based on its level of risk.…

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: If the expected return on a stock is 6 per cent. Risk free rate of return is 2 per cent and market…

A: Capital asset pricing model (CAPM) formula: Expected return = Risk free rate + (Beta *(Market rate -…

Q: Assume that the CAPM holds. Assume also that the expected return on the market portfolio is 10%. If…

A: Expected Return = Risk free rate + Beta ( Market Return - Risk Free Return)

Q: Currently the risk-free rate equals 5% and the expected return on the market portfolio equals 11%.…

A: Given: Risk free rate “Rf” = 5% Market return “Rm” = 11% Stock A Beta = 1.33 Stock B Beta = 0.7…

Q: If the expected rate of return on the market portfolio is 17% and T-bills yield 7%, what must be the…

A: Capital assets price model gives the required rate on stock considering the risk free rate and…

Q: ected return for a stock with a beta equal to 0.50?  - What is the marke

A: Given information :

Q: Find the Risk-Free Rate given the Expected Return on Stock Y is 20 %, the Expected Return on Market…

A: Expected return = Risk free rate + beta * (market return - risk free rate )

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: Find the Risk Free Rate given the cost of equity 12%, the Expected Return on Market Portfolio is 16%…

A: Expected return = Risk free rate + beta * (market return - risk free rate )

Q: Consider the CAPM. The risk-free rate is 5%, and the expected return on the market is 15%. What is…

A: In the above question we need to calculate the value of beta. Looking at the information given in…

Q: Using the CAPM, estimate the appropriate required rate of return for the three stocks listed here,…

A: In the given problem we need to calculate the Required rate of return of three stocks i.e. Stock A,…

Q: If the risk free rate is 4 %, the expected return on the market portfolio is 129% and the beta of…

A: Financial management consists of directing, planning, organizing and controlling of financial…

Q: Please help me with 11-4 ??‍♀️

A: Introduction: Investment in Two stock = 10000 Weight of Stock A = 30% Weight of Stock B = 70% Stock…

Q: A stock has a beta of 1.2 and an expected return of 11.8 percent. A risk-free asset currently earns…

A: Portfolio weight refers to the holding of all assets or investments. Weight of risk-free asset in a…

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…

Q: The risk-free rate of return is 4.8 percent and the market risk premium is 15 percent. What is the…

A: Risk free rate = 4.8% Market risk premium = 15% Beta = 1.80

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.