Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A stock has a beta of 1.05, the expected return on the market is 14 percent, and the risk-free rate is 8.4 percent. What must

A stock has a beta of 1.05, the expected return on the market is 14 percent, and the risk-free rate is 8.4 percent. What must the expected return on this stock be?

23.1%
14.28%
14.99%
13.57%

14.85%

A stock has an expected return of 15 percent, its beta is 0.7, and the risk-free rate is 8.25 percent. What must the expected return on the market be?

18.61%
17.89%
9.64%
17.00%

18.79%

You own a stock portfolio invested 15 percent in Stock Q, 25 percent in Stock R, 15 percent in Stock S, and 45 percent in Stock T. The betas for these four stocks are 0.79, 0.9, 0.71, and 1.05, respectively. What is the portfolio beta?

0.9
0.97
0.94
0.88
0.92

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

Valuation Measuring And Managing The Value Of Companies

Authors: McKinsey & Company Inc., Tom Copeland, Tim Koller, Jack Murrin

3rd Edition

ISBN: 0471361909, 978-0471361909

More Books

Students also viewed these Finance questions

Question

What is the environment we are trying to create?

Answered: 1 week ago

Question

How can we visually describe our goals?

Answered: 1 week ago