Question
Suppose that the Treasury bill rate is 6% rather than the 2%. Assume that the expected return on the market stays at 9%. Use the
Suppose that the Treasury bill rate is 6% rather than the 2%. Assume that the expected return on the market stays at 9%. Use the following information.
Stock | Beta () |
---|---|
United States Steel | 2.98 |
Southwest Airlines | 1.58 |
Amazon | 1.55 |
Wells Fargo | 1.14 |
ExxonMobil | 1.14 |
Johnson & Johnson | 0.75 |
Tesla | 0.50 |
Coca-Cola | 0.46 |
Consolidated Edison | 0.31 |
Newmont | 0.16 |
a.) Calculate the expected return from Johnson & Johnson. (Do not round intermediate calculations. Enter your answer 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 answer 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 answer as a percent rounded to 2 decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started