Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 12, 2024

Suppose a stock has a beta of 2, a standard deviation of 10%, and a current return of 12%. The risk-free rate is 2% and

Suppose a stock has a beta of 2, a standard deviation of 10%, and a current return of 12%. The risk-free rate is 2% and the market premium is 9%.

1.The expected return on this stock based on CAPM is

2.This stock's current return is

3.This stock currently has an alpha of

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Introductory Econometrics A Modern Approach

Authors: Jeffrey M. Wooldridge

4th edition

978-0324581621, 324581629, 324660545, 978-0324660548

More Books

Students also viewed these Economics questions

Question

★★★★★

A laptop computer that was originally priced at $2,400 now sells for $2,700. What is the percent of increase?

Answered: 1 week ago

Question

★★★★★

Calculate So for the reaction C2H4(g) + 3O2(g) 2CO2(g) + 2H2O(l) See Table 18.1 for values of standard entropies. Does the entropy of the chemical system increase or decrease as you expect? Explain.

Answered: 1 week ago

Question

★★★★★

When fitting a simple linear regression model, what is a (a) a residual? (b) a standardized residual? (c) an unusually large value of a standardized residual?

Answered: 1 week ago

Question

★★★★★

The following account balances are available for Tenfour Trucking Company on January 31, 2010: Cash .................. $ 27,340 Accounts Receivable ............. 41,500 Prepaid Insurance...

Answered: 1 week ago

Question

★★★★★

You need to create a small network segment in your office that includes five computers, all of which need to be connected to a printer. What is the easiest way to achieve this? a . Hub b . Switch c ....

Answered: 1 week ago

Question

★★★★★

Diamond & Turf Inc. is considering an investment in one of two machines. The sewing machine will increase productivity from sewing 190 baseballs per hour to sewing 342 per hour. The contribution...

Answered: 1 week ago

Question

★★★★★

Since the proposed medication is injectable are you planning on premediating your patients to avoid any potential injection related reactions?

Answered: 1 week ago

Question

★★★★★

2 . As we move forward with the workshop, we will discuss how important it is to communicate to your audience ( as Florence Nightingale did ) . What does the above graph / chart communicate? What are...

Answered: 1 week ago

Question

★★★★★

Do ITACS students represent information security vulnerabilities to Temple University, each other, or both? Explain your answer.

Answered: 1 week ago

Question

★★★★★

Question 3: All employees of a. certain company have medical coverage, 30% have deluxe coverage, 60% have standard coverage and 10% have economy coverage. From recorded data, the probability that an...

Answered: 1 week ago

Question

★★★★★

Give a detailed answer,Why Is the Demand for Online Shopping Increasing? Explain !

Answered: 1 week ago

Question

★★★★★

Describe three defenses to product liability

Answered: 1 week ago

Question

★★★★★

How easy the information is to remember

Answered: 1 week ago

Question

★★★★★

The personal characteristics of the sender

Answered: 1 week ago

Question

★★★★★

The quality of the argumentation

Answered: 1 week ago

Previous Question Next Question