Question
Investors expect the market rate of return in the coming year to be 12%. The T-Bill rate is 4%. Koda Industries stock has a beta
Investors expect the market rate of return in the coming year to be 12%. The T-Bill rate is 4%. Koda Industries stock has a beta of .5. The market value of its equity is $100 million.
Using CAPM, what is the expected rate of return on Koda Industries stock? If the market rate of return turns out to be 10%, what is your best guess as to the actual rate of return on Koda Industries Stock?
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Listed Volatility And Variance Derivatives
Authors: Yves Hilpisch
1st Edition
1119167914, 978-1119167914
