Solve the following questions If the expected return on a stock is 10 per cent. Risk free rate of return is 4 per cent and market return is 14 percent. What mut be the Betal If the value of expected return of Galfar Engineering 14 per cent, if Beta is 12 and market retum is 16 per cent. What must be the risk free rate 1f the expected return on a stock is 15 per cent, if the beta is 0.8 and risk free rate of return is 8 per cent. What must be the return on the market
Solve the following questions If the expected return on a stock is 10 per cent. Risk free rate of return is 4 per cent and market return is 14 percent. What mut be the Betal If the value of expected return of Galfar Engineering 14 per cent, if Beta is 12 and market retum is 16 per cent. What must be the risk free rate 1f the expected return on a stock is 15 per cent, if the beta is 0.8 and risk free rate of return is 8 per cent. What must be the return on the market
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
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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.
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Transcribed Image Text:Solve the following questions
If the expected return on a stock is 10 per cent. Risk free rate ot returm is 4 per cent and market return is 14 percent, What must be the etaT
If the value of expected return of Galfar Engineering 14 per cent, if Beta is 12 and market retum is 16 per cent. What must be the k free rate
If the expected return on a stock is 15 per cent, if the beta is 0.8 and risk free.rate of return is 8 per cent. What must be the return on the market?
16.75 96
18.50 %
19.25 9%
22.63 %
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