Charming Co. manufactures decorating products. Treasury bills currently yield 5.4% and the market is returning 8.1%. a.
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Charming Co. manufactures decorating products. Treasury bills currently yield 5.4% and the market is returning 8.1%.
a. Calculate Charming Co.’s beta from its characteristic line as depicted below.
b. What expected return would an average investor require to buy shares of Charming?
c. Would the answer to part (b) be a “fair†return?Why?
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
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