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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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