The monthly rate of return on T-bills is 1%. The market went up this month by 1.5%.

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The monthly rate of return on T-bills is 1%. The market went up this month by 1.5%. In addition, AmbChaser, Inc., which has an equity beta of 2, surprisingly just won a lawsuit that awards it $1 million immediately.

a. If the original value of AmbChaser equity were $100 million, what would you guess was the rate of return of its stock this month?

b. What is your answer to ( a ) if the market had expected AmbChaser to win $2 million?

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Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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Question Posted: Jul 31, 2024 04:01 AM

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The monthly rate of return on T-bills is 1%. The market went up this month by 1.5%.

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Investments

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