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

Question

1 Approved Answer

Consider the single-index model. The alpha of a stock is 3.00%. The return on the market index is 12.50%. The risk-free rate of return is

image text in transcribed

Consider the single-index model. The alpha of a stock is 3.00%. The return on the market index is 12.50%. The risk-free rate of return is 6.50%. The stock earns a return that exceeds the risk-free rate by 6.00%, and there are no firm-specific events affecting the stock performance. What is the beta of the stock? (Round your answer to 2 decimal places.) Beta 1.00

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

Contemporary Financial Management

Contemporary Financial Management

Authors: R. Charles Moyer, James R. McGuigan, William J. Kretlow

11th Edition

0324653506, 978-0324653502

More Books

Students also viewed these Finance questions

Question

★★★★★
A retailer estimates her fixed cost for placing an order at $ 1,000. Currently, she orders in optimal quantities of 400 units. She has, however, heard of the benefits of just- in- time purchasing a...

Answered: 1 week ago

Question

★★★★★
This problem concerns material in Appendix E. Based on the principles enunciated in Table E.1. a. Design an architecture with eight layers and make a case for it. b. Design one with six layers and...

Answered: 1 week ago

Question

★★★★★
Let A and B be two events in a sample space such that P(A) = 1 and P(B) = 1. Use the results of Exercise 5 to show that P(A B) = 1, P(AB) = 1, P(AB) = 0.

Answered: 1 week ago

Question

★★★★★
1. Describe how the work thats done at Google can result in employees feeling both very stressed and also very positive about their work and the company. In what way do these effects depend on Google...

Answered: 1 week ago

Question

★★★★★
Question 18 (2.5 points) Use the following information for the FOUR questions. (2 of 4). On January 1, 2020, Carson Inc. borrows $20,000 cash from the bank to finance a delivery truck. They sign a...

Answered: 1 week ago

Question

★★★★★
Reversing entries are used for adjusting entries involving accrued revenues and accrued expenses. True or False True False Reversing entries are used for adjusting entries involving accrued revenues...

Answered: 1 week ago

Question

★★★★★
ABC Electronics Corporation will be expanding its products by manufacturing power banks. It expects to sell these over a period of three years by updating their power bank models throughout the...

Answered: 1 week ago

Question

★★★★★
A scooter manufacturer wants to increase brand awareness on its website. What type of graphic should the company include on every webpage?

Answered: 1 week ago

Question

★★★★★
How can you use data to assist you with making appropriate business decisions? Will you use internal data, external data, or both?

Answered: 1 week ago

Question

★★★★★
It is intellectually simple to formulate an elegant strategy but not so with its implementation. Discuss

Answered: 1 week ago

Question

★★★★★
Consider the following project where times are in weeks. Activity Immediate Predecessors Duration A - 8 B - 12 C A,B 7 D B 4 AND A 2 F C 3 G E,F 7 H D,F 3 what is the early start for activity B using...

Answered: 1 week ago

Question

★★★★★
3.89 State, with evidence, whether each of the following statements is true or false: a. The complement of the union of two events is the intersection of their complements. b. The sum of the...

Answered: 1 week ago

Question

★★★★★
3.86 You are the meat products manager for Gigantic Foods, a large retail supermarket food distributor who is studying the characteristics of its whole chicken product mix. Chickens are purchased...

Answered: 1 week ago

Question

★★★★★
3.87 You and a friend are big soccer fans and are debating the possibility that FC Barcelona will win the final of the UEFA Champions League against Manchester United. You are supporting Manchester...

Answered: 1 week ago

Previous Question Next Question