Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 29, 2024

An asset has a Beta of 1.3, the return on the market is .08, and the risk-free rate is .02. If you knew that the

An asset has a Beta of 1.3, the return on the market is .08, and the risk-free rate is .02. If you knew that the actual return on this asset next year would be 12%, would you buy or sell that asset? Explain with numbers.

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

Multinational Financial Management

Authors: Alan C. Shapiro

7th Edition

0471395307, 9780471395300

More Books

Students also viewed these Finance questions

Question

★★★★★

(a) Show that if Is a 2 Ã 2 diagonal matrix with Î± b, then the only matrices that commute (under matrix multiplication) with D are other 2 Ã 2 diagonal matrices. (b) What...

Answered: 1 week ago

Question

★★★★★

Table 1.2 illustrates a possible scenario in a trade on gold futures. On day 1 , when the gold futures price is $\$ 1350$ per ounce, we enter a long position for two contracts, whose unit size is...

Answered: 1 week ago

Question

★★★★★

What other bills do I have to pay?

Answered: 1 week ago

Question

★★★★★

Assume that you are a consultant for Long Range Builders, a company that specializes in the mass production of wood trusses. The trusses are used in the building of houses throughout the United...

Answered: 1 week ago

Question

★★★★★

Cumulative abnormal returns (CAR) Select one: a. are used in event studies. b. are better measures of security returns due to economic-wide events than are abnormal returns (AR). c. are cumulated...

Answered: 1 week ago

Question

★★★★★

The comparative condensed balance sheets of Able Corporation are presented below. ABLE CORPORATION Comparative Condensed Balance Sheets December 31 2021 2020 Assets Current assets $ 72,000 $ 80,000...

Answered: 1 week ago

Question

★★★★★

What is one way a professional running a lineup can make the procedure suggestible to an eyewitness? A) encouraging the witness when they identify the suspect B) remaining silent when witnesses make...

Answered: 1 week ago

Question

★★★★★

Suppose that 3000 drivers in Wakanda were randomly breath-tested on 21 April 2019 and 116 were above the limit of 0.05 blood-alcohol level. On 15 May 2019, 4000 drivers were tested and 98 were above...

Answered: 1 week ago

Question

★★★★★

Which of the following is an appropriate guideline for waste disposal? O a. Clean trash cans regularly to remove drips and crumbs that provide food for pests Ob. Do not use plastic liners in trash...

Answered: 1 week ago

Question

★★★★★

As a manager, Jason spends much of his time coaching his employees and making sure that any required information from upper management reaches them in an understandable format. Jason would best be...

Answered: 1 week ago

Question

★★★★★

14. In a quality improvement team, the project leader or facilitator would do all of the following EXCEPT provide appropriate resources for problem solutions facilitate with quality improvement and...

Answered: 1 week ago

Question

★★★★★

What do the CIPP and Brinkerhoff models of evaluation add to what is missing from Kirkpatricks model? What benefit, if any, is there to viewing evaluation in this way?

Answered: 1 week ago

Question

★★★★★

According to the text, what is blended learning? What do you think of this as an approach to training new professional employees?

Answered: 1 week ago

Question

★★★★★

According to Nickols, what is a training stakeholder? What are some important categories of training stakeholders? Why is the notion of multiple stakeholders (or constituencies) important to training...

Answered: 1 week ago

Previous Question Next Question