A stock has an expected return of 10% and a beta of .9. If the risk-free rate is 4%, what is the beta of a stock portfolio that has an expected return of 14%? Assume the expected return of the market is the same for both. О 1.7 О 1.1 O 1.5 O 1.9 O 1.3

Q: Assume rhat the risk-free rate is 5.5% and the market rate  premium is 6%. A) What is the required…

A: As per CAPM, Required rate of return = Risk free Rate + (beta * Market Risk premium)

Q: We know the following expected returns for stock A and the market portfolio, given different states…

A: CAPM capital asset pricing model refers to the process of determining required rate of return or the…

Q: What are the expected returns for stocks Y and Z under the conditions shown below?   A0 0.04…

A: Calculation of Expected Return for Stock Y:

Q: Can you tell from the data below which stock's return has the highest correlation with the return of…

A: To Find: which stock's return has the highest correlation

Q: Please help me with 11-5 ??‍♀️

A:

Q: Suppose the CAPM holds. The risk-free rate is 2%, and the expected return of the market portfolio is…

A: As per CAPME(ri) = Rf  + Bi * (E(Rm) - Rf)E(ri) = Expected returnRf = Risk free rateBi = BetaE(Rm) =…

Q: The risk-free rate is 3.1 percent and the market expected return is 12.2 percent. What is the…

A: Risk free rate = rf = 3.1%Market return = mr = 12.2%Beta = b = 1.16

Q: Assume you have invested in two other stocks: Stock A has a beta of 1.20 and Stock B has a beta of…

A: Required return calculation is wrong. Correct solution is provided below.…

Q: A stock has a beta of 1.61, the expected return on the market is 0.07, and the risk-free rate is…

A: Return on stock :— It is the rate of return expected by the investors of stock.    According to CAPM…

Q: A stock has an expected return of 0.11, its beta is 1.22, and the risk-free rate is 0.03. What must…

A: It has been provided: Beta = 1.22 Expected return = 0.11 Risk-free rate = 0.03 Required: Expected…

Q: A stock has a beta of 1.9. The risk-free rate is 2%. Assume that the CAPM holds. What is the…

A: According to CAPM (Capital asset pricing model) ,k =Rf+[ b*(Rm-Rf)]wherek= expected return for the…

Q: Beta and required rate of return A stock has a required return of 11 percent; the risk-free rate is…

A: In the given question we require to compute the beta of stock from below details : Required return =…

Q: What is the beta of a stock where the expected rate of return is 14%, the market premium is 7%, and…

A: In the given question we are require to calculate the Beta of a stock: We can calculate the Beta of…

Q: Assume that the risk-free rate is 4% and the expected return on the market is 11.5%. What is the…

A: The Capital Asset Pricing Model (CAPM) is a tool used in finance to estimate the cost of equity,…

Q: Assume the expected return on the market is 7 percent and the risk-free rate is 4 percent. a. What…

A: In the given question we have two parts: In Part (A) we need to compute expected return for a stock…

Q: The risk-free rate of return is 3.7 percent and the market risk premium is 6.2 percent. What is the…

A: The given question can be solved using capital asset pricing model (CAPM)

Q: A stock has a risk premium of 7 percent and a beta of 1.4. If the risk-free rate is 2.2 percent.…

A: Following details are given to us in the question :Beta = 1.4Expected Return (ER) = ?Risk free rate…

Q: A stock has a beta of 0.73, the expected return on the market is 0.08, and the risk-free rate is…

A: To calculate the expected return on the stock by using the capital of surprising model we use the…

Q: Based on the table below, what is the expected return of the stock? Probability 0.20 0.10 0.40 0.20…

A: The expected return of the stock refers to the profit that the stock provides on average to the…

Q: What is the required return for the overall stock market? Round your answer to two decimal p % What…

A: Beta signifies how the systematic risk and the expected return of an investment are related to each…

Q: Assume that the risk-free rate of return is 46 and the market risk premium (ie., Rm- R) is 8%. If…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Which one of the following stocks is correctly priced if the risk-free rate of return is 3.0 percent…

A: In this question, we are required to determine the stock which is correctly priced.

Q: A stock has a beta of 1.2. The risk-free rate is 4%. Assume that the CAPM holds. A.  What is the…

A: Beta = 1.2Risk-free rate = 4%Capital Asset Pricing Model holds.

Q: A stock has an expected return of 16 percent, its beta is 0.6, and the risk-free rate is 6.4…

A: Given the following information: Expected return on stock (r) = 16% Beta (b) = 0.6 Risk free rate…

Q: None

A: To find the market risk premium and the expected rate of return on the market using the Capital…

Q: Assume that the financial markets are in equilibrium. Information on three particular shares is…

A: We will use and apply the CAPM model i.e. the capital asset pricing model. This model shows the…

Q: Suppose that the CAPM is a good model of risk in the stock market. Suppose also that the average…

A: Excess return on stocks = 10%Risk-free rate = 1%

Q: Chapter 6, Problem 14: Assume the data for two stocks, X and Y, are given below. Could the…

A: Expected return on Stock A (ErA) = 8%Expected return on Stock B (ErB) = 13%Standard deviation of…

Q: A stock has an expected return of 0.15, its beta is 0.52, and the expected return on the market is…

A: Expected return = 0.15 Beta = 0.52 Market return = 0.08

Q: A stock has a beta of 1.68, the expected return on the market is 14.72, and the risk-free rate is…

A: As per CAPM formula Expected return on stock = Risk free return + Beta*(Market return-Risk free…

Q: A stock has an expected return of 9.7 percent, its beta is .89, and the risk-free rate is 2.9…

A: Capital Asset Pricing Model (CAPM) is used to determine the required return on a stock which is the…