Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For the following stock information, use the computations at the bottom to draw a CAPM graph using the computation data: Stock: Amazon ( AMZN )

For the following stock information, use the computations at the bottom to draw a CAPM graph using the computation data: Stock: Amazon (AMZN)
Beta (5Y Monthly): 1.17
Yearly Return:
(AMZN graph over 1 year displayed on following page)
R=(Pt Pt-1+ D)/ Pt-1
R=(142,000,00090,000,000)/90,000,000
R=0.577 or 57.7%
Market Return (Rm):
(SPY graph over 1 year displayed on following page)
Rm =(438,000,000375,000,000)/375,000,000
Rm =0.168 or 16.8%
Risk Free Return (Rf):
26-week US Treasury Bill Yield as of 11/8/2023
Rf =5.26%
Computations:
Ri = Rf + B *(Rm Rf)
Ri =0.0526+1.17*(0.1680.0526)
Ri =0.1876
(Ri Rf)/ Bi
(0.5770.0526)/1.17
=0.4482
Rm Rf
0.1680.0526
=0.1154

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

Gapenskis Cases In Healthcare Finance

Authors: George H. Pink

6th Edition

1567939651, 978-1567939651

More Books

Students also viewed these Finance questions