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You are thinking of buying a stock priced at $102 per share. Assume that the risk-free rate is about 4.2% and the market risk premium
You are thinking of buying a stock priced at $102 per share. Assume that the risk-free rate is about 4.2% and the market risk premium is 5.2%. If you think the stock will rise to $123 per share by the end of the year, at which time it will pay a $2.78 dividend, what beta would it need to have for this expectation to be consistent the CAPM? The beta is (Round to two decimal places.) Suppose Intel stock has a beta of 0.75, whereas Boeing stock has a beta of 1.13. If the risk-free interest rate is 6.3% and the expected return of the market portfolio is 12.6%, according to the CAPM, a. What is the expected return of Intel stock? b. What is the expected return of Boeing stock? c. What is the beta of a portfolio that consists of 55% Intel stock and 45% Boeing stock? d. What is the expected return of a portfolio that consists of 55% Intel stock and 45% Boeing stock? (There are two ways to solve this.) a. What is the expected return of Intel stock? Intel's expected return is %. (Round to one decimal place.) EJH has a beta of 1.5,CSH has a beta of 0.5, and KMS has a beta of 1.1. If you put 24% of your money in EJH, 25% in CSH, and 51% in KMS, what is the beta of your portfolio? The beta of your portfolio is (Round to two decimal places.)
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