Question
Question 10 (2 points) You estimate the expected return on a stock to be 10%. The required rate of return on this stock is 12%.
Question 10 (2 points)
You estimate the expected return on a stock to be 10%. The required rate of return on this stock is 12%. The stock has a standard deviation of 25% and a beta of 1.2. Which of the following is correct.
Question 10 options:
|
| This is a good investment since it is required to return 12% for investors |
|
| This is a bad investment since the expected return is less than the required return |
|
| The stock is a bad investment because it has a beta greater than one. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
