Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

How was this solved algebraically? the answer to the problem is at the bottom but but i dont know the steps it took to get

How was this solved algebraically? the answer to the problem is at the bottom but but i dont know the steps it took to get to the answer

A stock has a of 0.5 and an expected return of 6%. Expected returns on the S&P 500 are 8%. What is the expected yield on T-bills?

Solution 3: E(Ri)= Rf+ i*[E(Rm)-Rf]

6 = Rf +0.5 [8-Rf]

Rf = 4%

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

Value Investing

Authors: Mike Hartley

1st Edition

979-8864443309

More Books

Students also viewed these Finance questions