Question
Expected return of risk-free asset is 3%, Required return of a stock A is 12%.(beta=1.2). Answer the following question using CAPM. 1. Calculate expected return
Expected return of risk-free asset is 3%, Required return of a stock A is 12%.(beta=1.2). Answer the following question using CAPM.
1. Calculate expected return of Market portfolio.
2. Calculate required return when a stock's beta is 0.
3. Assume that you buy a stock at $20(beta=0.8). After 1 year, This stock give you dividend $1, and you can sell this stock at $21. Is price of this stock is Overrated or Underrated?
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Health Care Finance Basic Tools For Nonfinancial Managers
Authors: Judith J. Baker, R.W. Baker, Neil R. Dworkin
5th Edition
1284118215, 978-1284118216
