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Suppose the rate of return on short - term government securities ( perceived to be risk - free ) is about 5 % . Suppose
Suppose the rate of return on shortterm government securities perceived to be riskfree is about Suppose also that the expected rate of return required by the market for a portfolio with a beta of is According to the capital asset pricing model: Required: a What is the expected rate of return on the market portfolio? Note: Round your answer to decimal place. b What would be the expected rate of return on a stock with Note: Round your answer to decimal place. c Suppose you consider buying a share of stock at $ The stock is expected to pay $ dividends next year and you expect it to sell then for $ The stock risk has been evaluated at Is the stock overpriced or underpriced? tablea Expected rate of return,
Suppose the rate of return on shortterm government securities perceived to be riskfree is about Suppose also that the expected rate of return required by the market for a portfolio with a beta of is According to the capital asset pricing model:
Required:
a What is the expected rate of return on the market portfolio?
Note: Round your answer to decimal place.
b What would be the expected rate of return on a stock with
Note: Round your answer to decimal place.
c Suppose you consider buying a share of stock at $ The stock is expected to pay $ dividends next year and you expect it to sell then for $ The stock risk has been evaluated at Is the stock overpriced or underpriced?
tablea Expected rate of return,
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