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I need help with question b. Use the information from question a to answer question b. a. Using following information and SML, find a Required
I need help with question b.
Use the information from question a to answer question b.
a. Using following information and SML, find a Required RoR for Home Depot (HD) and Lowe's (LOW). Please show your answers in 4 decimal-place numbers. (6 pts) Treasury Bond Rate (for Risk-free Rate, PRF) = 2.5%; Return for S&P 500 (Average Market Return, rm) = 15%; Beta for HD=0.93; Beta for Low = 1.25 (from Yahoo Finance) HD 2.5+0.93"(15-2.5) 14.125 % LOW 2.5 +1.25*(15-2.5) 18.125 % b. In relation to 'a', answer following further questions. Please show your answers in 4 decimal-place numbers. (6 pts) Due to Coronavirus issue, the Federal Reserve is lowering interest rate to help mitigate economic impacts. As a result, the Treasury Bond rate is declined to 0.5%, and the Return for S&P 500 is also declined to 13%. Assuming the same beta numbers for both HD and LOW, find the new required RoR. HD LOW a. Using following information and SML, find a Required RoR for Home Depot (HD) and Lowe's (LOW). Please show your answers in 4 decimal-place numbers. (6 pts) Treasury Bond Rate (for Risk-free Rate, PRF) = 2.5%; Return for S&P 500 (Average Market Return, rm) = 15%; Beta for HD=0.93; Beta for Low = 1.25 (from Yahoo Finance) HD 2.5+0.93"(15-2.5) 14.125 % LOW 2.5 +1.25*(15-2.5) 18.125 % b. In relation to 'a', answer following further questions. Please show your answers in 4 decimal-place numbers. (6 pts) Due to Coronavirus issue, the Federal Reserve is lowering interest rate to help mitigate economic impacts. As a result, the Treasury Bond rate is declined to 0.5%, and the Return for S&P 500 is also declined to 13%. Assuming the same beta numbers for both HD and LOW, find the new required RoR. HD LOWStep by Step Solution
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