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

Question

1 Approved Answer

A stock has a beta of 1.2 and an expected return of 11%. The risk free rate is 2% and the expected return on the

A stock has a beta of 1.2 and an expected return of 11%. The risk free rate is 2% and the expected return on the market portfolio is 12%. How much better (or worse) is the expected return on the stock compared to what it should be according to the CAPM? (Answer is -3.0)

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

The Total Inventors Manual

The Total Inventors Manual

Authors: Sean Michael Ragan

1st Edition

1681881586, 978-1681881584

More Books

Students also viewed these Finance questions

Question

★★★★★
The signal vectors s1 and s2 are used to represent binary symbols 1 and 0, respectively, in a coherent binary FSK system. The receiver decides in favor of symbol 1 when XTS1 > xTs2 where xTsi is the...

Answered: 1 week ago

Question

★★★★★
When is a seniority system protected against challenge under Title VII? When is a seniority system bona fide under Title VII?

Answered: 1 week ago

Question

★★★★★
Give the rejection region for a chi-square test of independence if the contingency table involves r rows and c columns. 6. r=3,c=5,a=.01

Answered: 1 week ago

Question

★★★★★
Fabrication of a parabolic mirror, it is proposed to make a backing for a parabolic mirror, by rotating a pan of slow-hardening plastic resin at constant speed until it hardens. Calculate the...

Answered: 1 week ago

Question

★★★★★
12. a If you were to use only the two risky funds and still require an expected return of 12%, what would be the investment proportions of your portfolio? b. Compare its standard deviation to that of...

Answered: 1 week ago

Question

★★★★★
The comparative balance sheet of Cromme Inc. for December 31, 2016 and 2015, is shown as follows: Dec. 31, 2016 Dec. 31, 2015 Assets 3 Cash $625,760.00 $585,920.00 4 Accounts receivable (net)...

Answered: 1 week ago

Question

★★★★★
What corrections would need to be made to the legal citation Doniphan v. Restler, 489 Conn. Cir. 522 (1983)?

Answered: 1 week ago

Question

★★★★★
Research the "Span of Control" theory of Vytautas Andrius Graiciunas (1898-1952) a Lithuanian-French management consultant, management theorist, and engineer. and answer the following three questions...

Answered: 1 week ago

Question

★★★★★
How should you go about assigning a date to each task? a. Work backward from your project's deadline. b. Projects to be completed in two weeks or less don't usually need dates. c. Only assign dates...

Answered: 1 week ago

Question

★★★★★
A three colour spinner was spun 90 times. The outcomes are summarized in the table below: What is the experimental probability of spinning Red? Colour Frequency Blue 5n Black 30n Red 10n

Answered: 1 week ago

Question

★★★★★
Abdulah is doing a research study on anxiety and eating. He has done the same study for the last 10 years and the results are consistently the same each time. Abdulah's research study and methods...

Answered: 1 week ago

Question

★★★★★
Describe how language reflects, builds on, and determines context?

Answered: 1 week ago

Question

★★★★★
Have you ever found yourself in a situation where you are entirely sure that you are using a term precisely (a good restaurant, a fun party, an affordable car) only to have someone wholeheartedly...

Answered: 1 week ago

Question

★★★★★
What connotative meanings does each of the following words have for you: religion, divorce, money, exercise, travel, dancing, parenthood? Why do you have the reaction you do to each word?

Answered: 1 week ago

Previous Question Next Question