INVESTMENTS(LL)W/CONNECT
INVESTMENTS(LL)W/CONNECT
11th Edition
ISBN: 9781260433920
Author: Bodie
Publisher: McGraw-Hill Publishing Co.
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Chapter 11, Problem 19PS

A

Summary Introduction

To calculate: The return rate of the stock when original value is INVESTMENTS(LL)W/CONNECT, Chapter 11, Problem 19PS million.

Introduction: Capital pricing model is used when market is not in equilibrium condition. It establishes a relation between return of the stock and risk premium. The return rate depends on the beta value and risk free rate.

B

Summary Introduction

To calculate: The return rate when there is a decrement in the initial capital.

Introduction: When firm gets some addition amount it will increase the return rate. When firm suffers from the loss it will decrease the return value. Return rate measures the gain and loss of the firm compared to the initial value.

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