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Suppose that the Treasury bill rate is 6% rather than 2 %. Assume the expected return on the market stays at 9%. Use the following
Suppose that the Treasury bill rate is 6% rather than 2 %. Assume the expected return on the market stays at 9%. Use the following information. Beta (B) Stock United States Steel 3.05 1.43 Amazon Southwest Airlines 1.31 The Travelers Companies Tesla 1.22 0.98 ExxonMobil 0.86 Johnson & Johnson 0.85 c-ola 0.66 Consolidated Edison 0.15 0.10 Newmont a. Calculate the expected return from Johnson & Johnson. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) b. Find the highest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) c. Find the lowest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) d. Would U.S. Steel offer a higher or lower expected return if the interest rate were 6% rather than 2%? Assume that the expected market return stays at 9% e. Would Coca-Cola offer a higher or lower expected return if the interest rate were 8%? % a. Expected return Highest Expected return Lowest expected return b
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