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

Question

1 Approved Answer

Suppose the market risk premium is 5% and also that the standard deviation of returns on the market portfolio is 0.19 . Further assume that

image text in transcribed
Suppose the market risk premium is 5% and also that the standard deviation of returns on the market portfolio is 0.19 . Further assume that the correlation between the returns on ABX (Barrick Gold) stock and returns on the market portfolio is - 0.10 , while the standard deviation of returns on ABX stock is 0.26 . Finally assume that the risk-free rate is 4%. Under the CAPM, what is the expected return on ABX stock

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

Step: 3

blur-text-image

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

Auditing Concepts For A Changing Environment With IDEA Software

Auditing Concepts For A Changing Environment With IDEA Software

Authors: Larry E. Rittenberg, Bradley J. Schwieger

4th Edition

0387321500, 978-0324180237

More Books

Students also viewed these Accounting questions

Question

★★★★★
Density of liquid water is = 1008 T/2 [kg/m3] with T in oC. If the temperature increases 10oC how much deeper does a 1 m layer of water become?

Answered: 1 week ago

Question

★★★★★
D. What two changes could you make to improve the more effective example?

Answered: 1 week ago

Question

★★★★★
Suppose every time units a process either increases by the amount with probability p or decreases by the amount with probability 1 p where p = 1 2 (1 + ). Show that as goes to 0, this process...

Answered: 1 week ago

Question

★★★★★
High blood pressure results from constriction of the arteries. To maintain a normal flow rate (flux), the heart has to pump harder, thus increasing the blood pressure. Use Poiseuilles Law to show...

Answered: 1 week ago

Question

★★★★★
1. Belkin Co. provides medical care and insurance benefits to its retirees. In the current year, Belkin agrees to contribute 5% of the employees $250,000 gross salaries to a retirement program. What...

Answered: 1 week ago

Question

★★★★★
. 1. Centralization and Agency Costs. a. What is profit? 1 Mark b. What is net cashflow? I Mark c. According to the textbook, what is the commonly accepted goal of a multinational corporation...

Answered: 1 week ago

Question

★★★★★
The temperature T = T(x,y) in C at point (x,y) satisfies Tx (1,2)=4 and Ty (1,2)=-8. If 4t-4 x = e t=1 sec. cm and y = 2 + In t cm, find the rate at which the temperature T changes when When t = 1...

Answered: 1 week ago

Question

★★★★★
Exercise: Let f(x) = 8x-4 - (a) Plot the graph of f(x) and f'(x). (b) Identify the points where f(x) is not differen- tiable..

Answered: 1 week ago

Question

★★★★★
. Straight rankings . Paired comparisons . Forced distribution Critical incident method

Answered: 1 week ago

Question

★★★★★
In the "Short-Answer Questions" section found in Chapter 16, answer question 1. In your explanation, describe in detail why litigation may not be as cost efficient as other methods of dispute...

Answered: 1 week ago

Question

★★★★★
Briefly describe 3 key lessons learned from reading Simon Sinek's book "Start with Why"?

Answered: 1 week ago

Question

★★★★★
How do these changes at Yahoo influence the companys employment branding?

Answered: 1 week ago

Question

★★★★★
Do you believe the HR situations described regarding Hurricane Rita would be typical in a disaster? Explain.

Answered: 1 week ago

Question

★★★★★
How would you describe the companys employment brand to your friends?

Answered: 1 week ago

Previous Question Next Question