Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Given the following excess return index model regression results Ra * = - 0 . 0 5 9 6 1 6 + 0 . 9

Given the following excess return index model regression results
Ra*=-0.059616+0.957478Rm*
where;
\sigma M =0.80226720, the return on the market portfolio is 0.085306, and the risk-free rate is 0.018302. Note Ra* and Rm* are excess returns.
Calculate the actual return for Stock A. Round to 4 decimals, and present answer as a decimal (.08, not 8%)
Answer:
0.0228

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

A Concise History Of International Finance From Babylon To Bernanke

Authors: Larry Neal

1st Edition

1107621216, 978-1107621213

More Books

Students also viewed these Finance questions