Question
Suppose that the Treasury bill rate is 6% rather than 2%. Assume that the expected return on the market stays at 10%. Use the following
Suppose that the Treasury bill rate is 6% rather than 2%. Assume that the expected return on the market stays at 10%. Use the following information. Stock Beta () A 1.78 B 1.54 C 1.53 D 0.98 E 0.95 F 0.80 G 0.75 H 0.66 I 0.42 J 0.40 a. Calculate the expected return from H. (Do not round intermediate calculations. Round your answer 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. Round your answer 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. Round your answer to 2 decimal places.) Lowest expected return % d. Assume that the expected market return stays at 10%. Would C offer a higher or lower expected return if the Treasury bill interest rate were 6% rather than 2%? Higher Lower e. Assume that the expected market return stays at 10%. Would I offer a higher or lower expected return if the interest rate were 6% rather than 8%? Higher Lower
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