FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose Autodesk stock has a beta of 2.10, whereas Costco stock has a beta of 0.76. If the risk-free interest rate is 4.5% and the

image text in transcribed
Suppose Autodesk stock has a beta of 2.10, whereas Costco stock has a beta of 0.76. If the risk-free interest rate is 4.5% and the expected return of the market portfolio is 11.0%, what is the expected return of a portfolio that consists of 70% Autodesk stock and 30% Costco stock, according to the CAPM? The expected return is %. (Round to two decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

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

Finance With Monte Carlo

Finance With Monte Carlo

Authors: Ronald W. Shonkwiler

2013th Edition

146148510X, 978-1461485100

More Books

Students also viewed these Finance questions

Question

★★★★★
The Buffalo Manufacturing Company has total assets of $12 million, an asset turnover of 2.2 times, and a net profit margin of 14%. a. What is Buffalo's return on assets? b. Find Buffalo's ROE, given...

Answered: 1 week ago

Question

★★★★★
What challenges are there?

Answered: 1 week ago

Question

★★★★★
To be equivalent to 10% compounded annually, what must be the nominal rate with: a. Semiannual compounding? b. Quarterly compounding? c. Monthly compounding?

Answered: 1 week ago

Question

★★★★★
Yesterday Sanjay sold 1,000 shares of stock that he owned for $45 per share. When he purchased the stock two years ago, Sanjay paid $50 per share. Every three months during the time that he held the...

Answered: 1 week ago

Question

★★★★★
Suppose Autodesk stock has a beta of 2.10, whereas Costco stock has a beta of 0.76. If the risk-free interest rate is 4.5% and the expected return of the market portfolio is 11.0%, what is the...

Answered: 1 week ago

Question

★★★★★
1. Differentiate among the main types of business-level strategies and determine which one Bombas pursued that provided them with a competitive advantage. Please explain. 2. Differentiate among the...

Answered: 1 week ago

Question

★★★★★
The use of primary elections completely eliminates the influence of political bosses or political machines in Texas. Question 24 options: True False

Answered: 1 week ago

Question

★★★★★
Gibson Valves produces cast bronze valves on an assembly line, currently producing 1600 valves per shift. If the production is increased to 2000 valves per shift, labor productivity will increase by

Answered: 1 week ago

Question

★★★★★
1. Consider the following: Time Period 1 2 3 4 Total cost Receipts $20,000 $30,000 $50,000 $60,000 Total Cost Disbursements $15,000 $36,000 $59,000 $44,000 The organization must maintain a $5,000...

Answered: 1 week ago

Question

★★★★★
Income Statements under Absorption Costing and Variable Costing Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on July 1 and operated at 100% of...

Answered: 1 week ago

Question

★★★★★
1) World Coffee, Incorporated has provided the following information pertaining to the store's month ended October 31, 2022: Sales revenue $100,000 Supplies expense $1,500 Interest expense 6,900 Rent...

Answered: 1 week ago

Question

★★★★★
Foreign investors. These often bring fixed ideas about HRM in terms of organizational culture, management philosophy and practice.

Answered: 1 week ago

Question

★★★★★
3 How would the situation be different if Volkswagen were to establish a joint venture with a Russian company? What people management principles and practices should be put in place?

Answered: 1 week ago

Question

★★★★★
Strained labourmanagement relations that are deep-rooted. Long-term benefits, they believe, can be obtained through appropriate employee training on company survival, and both managers and employees...

Answered: 1 week ago

Previous Question Next Question