FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

19. According to the capital asset pricing model (ie., CAPM), if the risk-free rate of return is 2,15 what expected return on the market portfolio

image text in transcribed
19. According to the capital asset pricing model (ie., CAPM), if the risk-free rate of return is 2,15 what expected return on the market portfolio is 11.5%, and the beta of the stock of ABC, Inc. is 1.75, what is the expected rate of return for the company's stock (rounded to 2 decimal places)? a. 18.25% b. 20.13% c.22.63% d. 17.63% e. None of the answers listed above is correct

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Dividend Investing For Beginners How To Build Your Investment Strategy Find The Best Dividend Stocks To Buy And Generate Passive Income

Dividend Investing For Beginners How To Build Your Investment Strategy Find The Best Dividend Stocks To Buy And Generate Passive Income

Authors: Greg Middleton

1st Edition

B0C1J1WMMJ, 979-8390685440

More Books

Students also viewed these Finance questions

Question

★★★★★
1. From this information, prepare a bank reconciliation for the Campbell's as of October 5, 2015, using a form like the one in Worksheet 4.1. 2. Given your answer to Question 1, what, if any,...

Answered: 1 week ago

Question

★★★★★
PR 5-2A. Sales-Related Transactions Using Perpetual Inventory System Obj. 2 The following selected transactions were completed by Amsterdam Supply Co which sells office supplies primarily to other...

Answered: 1 week ago

Question

★★★★★
=+oligopolists, a critical function of government?

Answered: 1 week ago

Question

★★★★★
The income statement of Benning Co. for the month of July shows net income of $1,400 based on Service Revenue $5,500, Wages Expense $2,300, Supplies Expense $1,200, and Utilities Expense $600. In...

Answered: 1 week ago

Question

★★★★★
19. According to the capital asset pricing model (ie., CAPM), if the risk-free rate of return is 2,15 what expected return on the market portfolio is 11.5%, and the beta of the stock of ABC, Inc. is...

Answered: 1 week ago

Question

★★★★★
2 Montreal Ltd. is a manufacturer of custom equipment and applies overhead to jobs on the basis of direct 3 labour hours. Montreal Ltd. estimated $840,000 overhead costs and 20,000 direct labour...

Answered: 1 week ago

Question

★★★★★
Q3. The number of days in succession that the probability professor gets to class on time can be represented by a random variable X with the pmf a. Find the value of k. b. Obtain the cdf of X. c....

Answered: 1 week ago

Question

★★★★★
Jason Company offered a contest in which the winner would receive P1,000,000 payable over twenty years. On December 31, 2019, Jason Company announced the winner of the contest and signed a note...

Answered: 1 week ago

Question

★★★★★
Time left 0:33:08 Valerie works as a salesperson for ABC Pharmaceuticals. She receives a commision of 6.8% on monthly sales up to $5392, 9% on the next $8017, and 14.3% on any additional sales during...

Answered: 1 week ago

Question

★★★★★
Find any relative extrema of the function. List each extremum along with the X-value at which it occurs. Identify intervals over which the function is increasing and over which it is decreasing. Then...

Answered: 1 week ago

Question

★★★★★
3.42 An offshore platform is built to withstand ocean wave forces. (a) The annual max. wave height of the ocean waves (above mean sea level) is a random variable with a Gaussian distribution having a...

Answered: 1 week ago

Previous Question Next Question