Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 06, 2024

The risk-free rate is 4.0 percent and the expected return on the market is 8 percent. Stock A has a beta of 1.35. For a

The risk-free rate is 4.0 percent and the expected return on the market is 8 percent. Stock A has a beta of 1.35. For a given year, Stock A returned 12.0 percent . What is the stock A's abnormal return based on CAPM model?

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

Recommended Textbook for

Codes Of Finance

Authors: Vincent Antonin Lépinay

1st Edition

0691151504, 978-0691151502

More Books

Students also viewed these Finance questions

Question

★★★★★

Describe the following factorial design. How many independent and dependent variables are there? How many levels are there for each treatment? If the data were known, could interaction be determined...

Answered: 1 week ago

Question

★★★★★

is the "basic" protocol of that is used for naming and numbering addresses on the Internet. ARPANET LAN WAN TCP / IP

Answered: 1 week ago

Question

★★★★★

7.19 Refer to Exercise 7.17, part b. a. Sketch the sampling distribution for the sample mean and locate the mean and the interval 20/Vn along the x-axis. b. Shade the area under the curve that...

Answered: 1 week ago

Question

★★★★★

Alex, Inc., buys 40 percent of Steinbart Company on January 1, 2010, for $530,000. The equity method of accounting is to be used. Steinbarts net assets on that date were $1.2 million. Any excess of...

Answered: 1 week ago

Question

★★★★★

Does the error suggest an overstatement or an understatement? Explain. Which accounts receivable assertion (list one) is incorrect because of this error? Explain. Does the result of your test suggest...

Answered: 1 week ago

Question

★★★★★

Cole Electronikz, Inc., also distributes computers produced by a national manufacturer. Cole guarantees its products for the period from the date of purchase to the end of the year of purchase with...

Answered: 1 week ago

Question

★★★★★

The collection of a $12,000 account within the 2 percent discount period will result in a a. debit to Sales Discounts for $240. b. debit to Accounts Receivable for $11,760. c. credit to Cash for...

Answered: 1 week ago

Question

★★★★★

Which action would improve the asset conversion cycle? A successful marketing campaign that increases sales volume. Renegotiating with suppliers to increase the credit period on supplier payments. A...

Answered: 1 week ago

Question

★★★★★

You are presented with the following alphabetical list of items, selected from the financial statements of Saputo Inc.: For Tach of the below accounts, identify the following: (a) (b) (c) the type of...

Answered: 1 week ago

Question

★★★★★

"When in Rome, do as the Romans do" is an example of which "ethical trap"? O a. Cultural relativism Ob. Just distribution O c. The Friedman Doctrine O d. Moral expediency O e. Rights theory A a. 's...

Answered: 1 week ago

Question

★★★★★

Exercise 12-6 (Algo) Indirect: Cash flows from operating activities LO P2 Salud Company reports the following information. Selected Annual Income Statement Data Net income Depreciation expense Gain...

Answered: 1 week ago

Question

★★★★★

Discuss issues related to performance-based pay for executives. page 518

Answered: 1 week ago

Question

★★★★★

Discuss how employee benefits in the United States compare with those in other countries. page 549

Answered: 1 week ago

Question

★★★★★

List the major factors to consider in matching the pay strategy to the organizations strategy. page 524

Answered: 1 week ago

Previous Question Next Question