Question
If the expected return on the market portfolio is estimated to be 18 %, the risk-free rate of interest is 8 %, and the beta
If the expected return on the market portfolio is estimated to be 18%, the risk-free rate of interest is 8%, and the beta of asset i is 0.80, what is the expected return on asset i using CAPM model? ____ % Place your answer as a PERCENT using two decimal places and no percentage sign. For example, if your answer is seven point five two percent, type 7.52.
Financial analysts have estimated the returns on shares of Drucker Corporation and the overall market portfolio under various economic conditions as follows. The return for Drucker in the following three economic states of nature are forecasted to be: -18% in recession, +11% in moderate growth, and +33% in a boom. Estimates for the market as a whole in the same economic states are -12% in recession, +10% in moderate growth, and +25% in boom. The analyst considers each state to be equally likely. Using these data, compute the beta of Drucker Corporation's stock. Place your answer as a number with at least three decimal places.
Toyota Corp.'s stock price has a variance of returns equal to 0.0295. Honda Corp.'s stock price has a variance of returns equal to 0.0505. The covariance between Toyota and Honda is 0.0675. What is the standard deviation of a portfolio consisting of 50% Toyota and 50% Honda? *Place your answer in decimal form
Toyota Corp.'s stock price has a variance of returns of 0.0295. Honda Corp.'s stock has a variance of returns of 0.0495. The covariance between Toyota and Honda is 0.0285. What is the correlation coefficient between Toyota and Honda? *Use at least four decimal places in your answer.
The return on the Rush Corporation in the state of recession is estimated to be -25% and the return on Rush in the state of boom is estimated to be 35%. The return on the Oberman Corporation in the state of recession is estimated to be 43% and the return on Oberman in the state of boom is estimated to be -15%. Given this information, what is the covariance between Rush and Oberman if there is a 0.60 probability that the economy will be in the state of boom and a 0.40 probability that the economy will be in the state of recession. Place your answer in decimal form and not as a percentage.
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