Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Assume that the average market price of risk in the U.S. is 1.46, the standard deviation of S&P 500 (i.e., market portfolio) is 0.21, the

image text in transcribed

Assume that the average market price of risk in the U.S. is 1.46, the standard deviation of S&P 500 (i.e., market portfolio) is 0.21, the risk-free rate is 0.04, what should be the expected return of S&P 500? Round your answer to 4 decimal places. For example, if your answer is 3.205%, then please write down 0.0321

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

Valuing Agile The Financial Management Of Agile Projects

Authors: Alan Moran

1st Edition

0117082880, 9780117082885

More Books

Students also viewed these Finance questions

Question

Compute the derivative of f(x)cos(-4/5x)

Answered: 1 week ago

Question

Discuss the process involved in selection.

Answered: 1 week ago

Question

Differentiate tan(7x+9x-2.5)

Answered: 1 week ago

Question

Explain the sources of recruitment.

Answered: 1 week ago