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Suppose that the Treasury bill rate is 5% and the expected return on the market stays at 9%. Use the following information. Stock Caterpillar Dow
Suppose that the Treasury bill rate is 5% and the expected return on the market stays at 9%. Use the following information. Stock Caterpillar Dow Chemical Ford Microsoft Apple Johnson & Johnson Walmart Campbell Soup Consolidated Edison Newmont Beta (6) 1.67 1.56 1.39 0.97 0.88 0.56 0.52 0.34 0.20 0.00 a. Calculate the expected return from Johnson & Johnson. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Expected return % b. Find the highest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Highest expected return % c. Find the lowest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number.) Lowest expected return % d. Would Ford offer a higher or lower expected return if the interest rate were 2% rather than 5%? Assume that the expected market return stays at 9%. Higher Lower e. Would Walmart offer a higher or lower expected return if the interest rate were 8% rather than 5%? Assume the expected market return stays at 9%. Higher Lower
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