Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on May 21, 2024

A stock with a beta of 1.3 has an expected rate of return of 12%. The market-premium (market rate of return - risk-less rate) of

A stock with a beta of 1.3 has an expected rate of return of 12%. The market-premium (market rate of return - risk-less rate) of the market is 6.1%. What is the risk-less rate? Assume CAPM is true.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

Step: 3

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

Personal Finance

Authors: Jeff Madura, Hardeep Singh Gill

3rd Canadian Edition

978-0133035575, 133035573, 978-0133970524, 133970523, 978-0134040042

More Books

Students also viewed these Finance questions

Question

1. Assume stocks A and B have had identical stock prices every day for the past three years. Stock A pays a dividend but Stock B does not. Which one of these statements applies to these stocks for...

Answered: 1 week ago

Question

Hey, you answered some questions a while ago but 5 of them were wrong. Is that possible for you make them right? Here are the questions: Red highlighting means wrong. QUESTION 1 An implication of the...

Answered: 1 week ago

Question

Top hedge fund manager Sally Buffit believes that a stock with the same market risk as the S&P 500 will sell at year-end at a price of $60. The stock will pay a dividend at year-end of $2.00. Assume...

Answered: 1 week ago

Question

★★★★★

The table lists the actual annual cost y to drive a midsize car 15,000 miles per year for selected years X. (a) Predict whether the correlation coefficient is positive, negative, or zero. (b) Find a...

Answered: 1 week ago

Question

★★★★★

Briefly explain the reason(s) for the separate disclosure of components of financial performance such as discontinued operations, exceptional and extraordinary items in published company financial...

Answered: 1 week ago

Question

★★★★★

1053. Why are debt securities regularly rated while equity securities are not?

Answered: 1 week ago

Question

★★★★★

2.38 International Baccalaureate The International Baccalaureate (IB) program is an accelerated academic program offered at a growing number of high schools throughout the country. Students enrolled...

Answered: 1 week ago

Question

★★★★★

Sara Collier, the bookkeeper for Danner, Cheney, and Howe, a political consulting firm, has recently completed an accounting course at her local college. One of the topics covered in the course was...

Answered: 1 week ago

Question

★★★★★

Problem 1 ABC Company provides a defined benefit pension plan for its employees. On January 1, 2020, the following balances related to this plan. Plan assets (fair value) Projected benefit obligation...

Answered: 1 week ago

Question

★★★★★

Romez Limited borrowed $66,000 from National bank on July 1 for three months; 5% interest is payable the first of each month, starting August 1. Romez's year end is August 31 and the company records...

Answered: 1 week ago

Question

★★★★★

Provide real-world examples of companies that prioritize attitude when recruiting people instead for their skills? Connect it with this phrase: "We recruit for attitude and train for skill," Atul...

Answered: 1 week ago

Question

★★★★★

1. How long should a clean status last for? 2.What should happen if a clearance check is required when no QC personnel are on duty? 3. How frequently should staff wash hands or sanitise their gloves

Answered: 1 week ago

Question

★★★★★

Identify a product that you believe would benefit from being redesigned. What are the current problems with the product? What specific design improvements do you recommend? Why and how will your...

Answered: 1 week ago

Question

★★★★★

Find your own example of greenwashing. Explain why you think it constitutes greenwashing. If you were the CEO, would you have authorized the ad you chose? Why or why not?

Answered: 1 week ago

Question

★★★★★

Q22 (a) has been address You receive a task to create a new subnet with two servers. This subnet will be connected to an existing router. The new subnet allocated with network 192.168.20.24/29. The...

Answered: 1 week ago

Question

★★★★★

JPJ Corp has sales of $1.17 million, accounts receivable of $50,000, total assets of $5.03 million (of which $2.92 million are fixed assets), inventory of $146,000, and cost of goods sold of...

Answered: 1 week ago

Question

★★★★★

Which of the companies has the lowest accounts receivable turnover in the year 20X2? a. Company A. b. Company B. c. Company C. d. CompanyD. 20X1 20X2 Credit Sales Average Receivables Balance $1.0...

Answered: 1 week ago

Question

★★★★★

Duration Blue Steel Community Bank has the following market value balance sheet: Asset or Liability Market Value (in millions) Duration (in years) Federal funds deposits $ 28 0 Accounts receivable...

Answered: 1 week ago

Question

★★★★★

Duration What is the duration of a bond with four years to maturity and a coupon of 9 percent paid annually if the bond sells at par? LO.1

Answered: 1 week ago

Question

★★★★★

Futures Quotes Refer to Table 25.2 in the text to answer this question. Suppose you sell fi ve May 2006 silver futures contracts on March 7, 2006, at the last price of the day. What will your profi t...

Answered: 1 week ago

Previous Question Next Question