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

Question

1 Approved Answer

Suppose the risk-free return is 3.8% and the market portfolio has an expected return of 7.7%,and a volatility of 15.4%. Merck & Co.stock has a

Suppose the risk-free return is 3.8% and the market portfolio has an expected return of 7.7%,and a volatility of 15.4%. Merck & Co.stock has a 20.5% volatility and a correlation with the market of 0.045.Under the CAPM assumptions,Merck &Co.stock's expected return is..?

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_2

Step: 3

blur-text-image_3

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

Financial Modeling

Financial Modeling

Authors: Simon Benninga

2nd Edition

0262024829, 9780262024822

More Books

Students also viewed these Finance questions

Question

★★★★★
Determine the enthalpy change of this reaction. Data can be found in Table 7.2. Mg(s) + N2O5(g) ( MgO(s) + 2NO2(g)

Answered: 1 week ago

Question

★★★★★
Use the International Tab of LexisNexis Tax Center to answer the following questions: a. How many treatises and analytical materials sources are found for a search of William H. Byrnes? b. Which...

Answered: 1 week ago

Question

★★★★★
Pat takes part in a quiz show with multiple choice questions. There are three possible answers to each question. The probability that she knows the answer to a question is p. If Pat does not know the...

Answered: 1 week ago

Question

★★★★★
The Foreman Companys earnings and common stock dividends have been growing at an annual rate of 6 percent over the past 10 years and are expected to continue growing at this rate for the foreseeable...

Answered: 1 week ago

Question

★★★★★
PB15. LO 5.3 Using the following account balances, calculate for the two years presented: A. working capital B. current ratio Accounts payable Accounts receivable Cash Prepaid insurance Salaries...

Answered: 1 week ago

Question

★★★★★
(a) CREATE A COPY of an existing file named whoopdedoo.txt that is in your current working directory, so that the copy is named tapioca.txt and is also in your current working directory.cd /...

Answered: 1 week ago

Question

★★★★★
a. The owner invested $17,800 cash in the company. b. The company purchased supplies for $1,200 cash. c. The owner invested $11,400 of equipment in the company in exchange for more common stock. d....

Answered: 1 week ago

Question

★★★★★
Fara wants to buy a new smartphone and is willing to pay $800 based on her preferences and budget. She finds the phone on sale for $600, and she decides to purchase it. What does the difference...

Answered: 1 week ago

Question

★★★★★
( b ) Martha approaches Maria Swanepoel of Swanepoel Inc., an attorney at law practicing in the Pretoria East area to assist her with her claim for damages resulting from her dispute with Joseph. The...

Answered: 1 week ago

Question

★★★★★
As of November 1, 1999, the exchange rate between the Brazilian real and U.S. dollar is R$1.73/$. The consensus forecast for the U.S. and Brazil inflation rates for the next 1-year period is 3.3% and...

Answered: 1 week ago

Question

★★★★★
Polycorp plans to pay a dividend of $6 in one year time dividend are then expected to increase by $1 a year for 5 year after that they are expected to grow at 2%pa forever shareholders required...

Answered: 1 week ago

Question

★★★★★
11. Based on the following rules regarding the confidence we have in information in a communication context, find examples from your everyday life where the rules have relevance: (a) The spatial rule...

Answered: 1 week ago

Question

★★★★★
2. Describe a situation from your own everyday life where it is clear that the situation in its consequence becomes the way you define it.

Answered: 1 week ago

Question

★★★★★
5. What do we mean when we say that social facts are mental constructions? Explain this with an example from your own everyday life.

Answered: 1 week ago

Previous Question Next Question