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

Question

1 Approved Answer

Suppose Autodesk stock has a beta of 2.50, whereas Costco stock has a beta of 0.74. If the risk-free interest rate is 5.5% and the

image text in transcribed

Suppose Autodesk stock has a beta of 2.50, whereas Costco stock has a beta of 0.74. If the risk-free interest rate is 5.5% and the expected return of the market portfolio is 14.0%, 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_2

Step: 3

blur-text-image_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

Energy And Finance Sustainability In The Energy Industry

Energy And Finance Sustainability In The Energy Industry

Authors: André Dorsman, Özgür Arslan-Ayaydin, Mehmet Baha Karan

1st Edition

3319322664, 978-3319322667

More Books

Students also viewed these Finance questions

Question

★★★★★
A rocket is used to place a synchronous satellite in orbit about the earth. What is the speed of the satellite in orbit?

Answered: 1 week ago

Question

★★★★★
3 Use the model to analyze the macroeconomic effects of trade policies

Answered: 1 week ago

Question

★★★★★
On October 1, 2015, the firm of Orson, Dorr, and Killough decided to liquidate its partnership. The partners have capital balances of $48,000, $63,000, and $11,000, respec- tively. The cash balance...

Answered: 1 week ago

Question

★★★★★
Stockholders equity for Channa Co. on December 31 was as follows: Preferred stock, $14 par, 25,000 shares issued and outstanding . . . . . . . . $ 350,000 Paid-in capital in excess of parpreferred...

Answered: 1 week ago

Question

★★★★★
Suppose Autodesk stock has a beta of 2.50, whereas Costco stock has a beta of 0.74. If the risk-free interest rate is 5.5% and the expected return of the market portfolio is 14.0%, what is the...

Answered: 1 week ago

Question

★★★★★
1 Chrome Manufacturing Sdn Bhd reported the following data in April 2022: Direct material Direct labor Factory overhead Selling Expenses Administrative Expenses a) Variable cost per unit sold Fixed...

Answered: 1 week ago

Question

★★★★★
Problem 2: The number of minutes between successive arrivals of airplanes at an airport is a random variable X with cumulative distribution function a. Find P(3X9). F(x)=1-e-0.2x *>0 b. Find the...

Answered: 1 week ago

Question

★★★★★
One of Arianna s co - workers repeatedly makes graphic comments about her body. He also texts nude images of himself to her cell phone. Arianna has likely experienced. hostile work environmet...

Answered: 1 week ago

Question

★★★★★
EXERCISE 36 Elimination Entry, Consolidated Balance Sheet LO 8 On December 31, 2018, Price Company purchased a controlling interest in Shipley Company. The balance sheet of Price Company and the...

Answered: 1 week ago

Question

★★★★★
Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. The firm's...

Answered: 1 week ago

Question

★★★★★
The temperature of the earth's atmosphere drops about 5C for every 1000 m of the elevation above the earth's surface. If the air temperature at the ground level is 15C and the pressure is 760 mmHg,...

Answered: 1 week ago

Question

★★★★★
2. What is an information system? How does it work? What are its management, organization, and technology components and why are complementary assets essential for ensuring that information systems...

Answered: 1 week ago

Question

★★★★★
1. How are information systems transforming business, and why are they so essential for running and managing a business today?

Answered: 1 week ago

Question

★★★★★
7. Explain how culture can function as resistance to dominant value systems.

Answered: 1 week ago

Previous Question Next Question