Question
2. The following data is provided on two stocks, IBM and WMT, the market risk premium, and the risk-free rate. Stock Actual Stock Return Market
2.
The following data is provided on two stocks, IBM and WMT, the market risk premium, and the risk-free rate.
| Stock | Actual Stock Return | Market Risk Premium | Risk-free Rate | Stock Beta |
| IBM | 5.0% | 6.0% | 2.0% | 0.9 |
| WMT | 11.0% | 6.0% | 2.0% | 1.3 |
What is the abnormal return (i.e., alpha) for stock WMT?
Enter your answer in the following format: 0.1234
Hint: Answer is between 0.0106 and 0.0130
4.
The following data is provided on two stocks, IBM and WMT, the market risk premium, and the risk-free rate.
| Stock | Actual Stock Return | Market Risk Premium | Risk-free Rate | Stock Beta |
| IBM | 5.0% | 6.0% | 2.0% | 0.9 |
| WMT | 11.0% | 6.0% | 2.0% | 1.3 |
What is the abnormal return (i.e., alpha) for stock IBM?
Enter your answer in the following format: 0.1234
Hint: Answer is between -0.0214 and -0.0264
14.
The following data is provided on two stocks, IBM and WMT, the market risk premium, and the risk-free rate.
| Stock | Actual Stock Return | Market Risk Premium | Risk-free Rate | Stock Beta |
| IBM | 5.0% | 6.0% | 2.0% | 0.9 |
| WMT | 11.0% | 6.0% | 2.0% | 1.3 |
What is the expected return for stock IBM?
Enter your answer in the following format: + or - 0.1234
Hint: Answer is between 0.0651 and 0.0829
15.
The following data is provided on two stocks, IBM and WMT, the market risk premium, and the risk-free rate.
| Stock | Actual Stock Return | Market Risk Premium | Risk-free Rate | Stock Beta |
| IBM | 5.0% | 6.0% | 2.0% | 0.9 |
| WMT | 11.0% | 6.0% | 2.0% | 1.3 |
What is the expected return for stock WMT?
Enter your answer in the following format: + or - 0.1234
Hint: Answer is between 0.0892 and 0.1088
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Financial Management For Public Health And Not For Profit Organizations
Authors: Steven A. Finkler
1st Edition
0130176141, 9780130176141
