Beale Manufacturing Company has a beta of 1.1, and Foley Industries has a beta of 0.20. The required return on an index fund that holds the entire stock market is 14%. The risk-free rate of interest is 2.5%. By how much does Beale's required return exceed Foley's required return? Do not round intermediate calculations. Round your answer to two decimal places.   %

Q: Suppose the common stock of United Industries has a beta of 1.09 and an expected return of 13.9…

A: Introduction: When it comes to the stock market, investors need to understand every term and phrase.…

Q: Assume that the risk-free rate is 2.5% and the required return on the market is 8%. What is the…

A: According to capital assets pricing model, The expected return on equity stock is calculated as…

Q: A stock has a required return of 8%, the risk-free,rate is 3.5%, and the market risk premium is 2%.…

A: Required return: 8%Risk free rate: 3.5%Market risk: 2%a. Beta=(Required return-Risk free rate) /…

Q: Beale Manufacturing Company has a beta of 1.9, and Foley Industries has a beta of 0.3. The required…

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

Q: AA Corporation's stock has a beta of 1.2. The risk-free rate is 6%, and the expected return on the…

A: Beta = 1.2Risk-free rate = 6% = 0.06Expected return on the market = 11% = 0.11

Q: Assume that the risk-free rate is 6.00% and the market risk premium is 6.75%. What is the expected…

A: Given: Risk free rate=6% Market risk premium = 6.75%

Q: stock has a required return of 8%, the risk-free rate is 3.5%, and the market risk premium is 3%. a.…

A: CAPM is an abbreviation used for Capital asset pricing model. This model is used to determine the…

Q: expected

A: Introduction: Capital asset pricing model or CAPM as it is known widely is a tool which helps in…

Q: Stock Y has a beta of 1.40 and an expected return of 15.2 percent. Stock Z has a beta of .85 and an…

A: The expected rate of return on an investment with no default risk is known as the "risk-free rate."…

Q: our investment club has only two stocks in its portfolio. $15,000 is invested in a stock with a beta…

A: Portfolio Beta is the weighted average beta of individual stock  Weight of stock 1 = 15000 /…

Q: Beale Manufacturing Company has a beta of 1.8, and Foley Industries has a beta of 0.20. The required…

A: In this question we require to calculate the required return for Beale Manufacturing Company and…

Q: A stock has a required return of 7%, the risk-free rate is 2.5%, and the market risk premium is 3%.…

A: Required rate of return as per CAPM  :— Expected Return = Rf + (Rm - Rf) beta of the…

Q: Stock A has a beta of 1.62 and an expected return of 19.1 percent. Stock B has a beta of 1.02 and an…

A: The Capital Asset Pricing Model (CAPM) is a financial model that describes the relationship between…

Q: What is the required rate of return on AA's stock?

A: Required rate of return (RRR) is the least required rate at which an investor will agree to invest…

Q: A stock has an expected return of 17 percent, its beta is 1.35, and the risk-free rate is 4 percent.…

A: CAPM is capital asset pricing model to compute the cost of equity based on company risk index as…

Q: Assume that you run a regression on the raw returns of the stock of Company J against the raw…

A: Jensen’s alpha is an important metric in the world of investments. This metric shows the quantum of…

Q: What is the required rate of return on AA's stock?

A: Required Rate of Return: It is the minimum rate acceptable by the investor for owning the stock of…

Q: The expected return on stock A is 11.70 percent. The expected return on stock B is 9.40 percent.…

A: The objective of the question is to calculate the risk premium using the Capital Asset Pricing Model…

Q: A stock has a beta of 1.2 and an expected return of 11.6 percent. If the risk-free rate is 5.1…

A: Given,  Expected return 11.6 percent. risk-free rate is 5.1 percent

Q: places. If the market risk premium increased to 9%, what would happen to the stock's required rate…

A: According to CAPM Required rate =Risk free rate +Beta x market risk premium

Q: What should be the market price of the stock?   $     If the current market price of the stock is…

A: Share Price: The price of a share is an indication of its present value to buyers and sellers.…

Q: a. What is the market risk premium? Show your work. b. What is the cost of equity for XYZ? Show your…

A: Please note that only 1 question can be solved under the Answering Guidelines. The solution to stock…

Q: answer each part correctly PLEASE.

A: Capital asset pricing model (CAPM) is a tool used to measure the expected return on an investment.…

Q: AA Corporation's stock has a beta of 1.1. The risk-free rate is 3%, and the expected return on the…

A: We will use the CAPM (Capital Asset Pricing Model) here. The CAPM model essentially describes the…

Q: Consider the single-index model. The alpha of a stock is 2.00%. The return on the market index is…

A: Alpha of the stock = 2%Return on market (RM) = 12%Risk-free rate of return (RF) = 5.5%Actual return…

Q: Assume that the risk-free rate is 4% and the market risk premium is 2%. a. What are the betas of…

A: Using Excel function SLOPE(), we can determine the beta of the stocks. SLOPE() requires 2…

Q: A stock has a beta of 1.24 and an expected return of 12.2 percent. A risk-free asset currently earns…

A:

Q: Stock R has a beta of 1.4, Stock S has a beta of 0.95, the expected rate of return on an average…

A: The required return of the stock is calculated using the Capital asset pricing model(CAPM ).    The…

Q: Beale Manufacturing Company has a beta of 1.9, and Foley Industries has a beta of 0.4. The required…

A: Investors have different options to make investments, and the motive behind investments is to…

Q: A stock has a beta of 0.65, the expected return on the market is 15%, and the risk- free rate is 8%.…

A: In the given problem we require to calculate the expected return on stock: According to CAPM i.e.…

Q: A stock has a beta of 1.21 and an expected return of 11.9 percent. A risk-free asset currently earns…

A: Beta of portfolio = 2.41Stock beta = 1.21Stock A expected return = 11.9%Risk-free asset return =…

Q: Required Rate of Return Stock R has a beta of 1.8, Stock S has a beta of 0.35, the expected rate of…

A: Beta coefficient shows the systematic risk of the assets. The beta factor shows the systematic risk…

Q: Ο A stock has a required return of 16%, the risk-free rate is 5.5%, and the market risk premium is…

A: To calculate the stock's beta and then determine the effect of an increase in the market risk…

Q: 2. Required Rate of Return Suppose TRF = 4%, FM = 9%, and TA = 8%. (a) Calculate Stock A's beta.…

A: Captial asset pricing model defines that the required rate of return or cost of equity is the sum of…

Q: risk-free rate of interest is 4%. Use a 7% risk premium for the market portfolio. Note: Do not round…

A: CAPM model is based on risk of stock. The CAPM would gives the risk based required rate considering…

Q: Beale Manufacturing Company has a beta of 1.2, and Foley Industries has a beta of 0.50. The required…

A: Solution: Required Return = Rf + Beta(Rm-Rf) Return for Beale = 4.5% + 1.2(9% - 4.5%) = 4.5% +…

Q: A stock has an expected return of 15.2 percent, the risk-free rate is 3.4 percent, and the market…

A: As per CAPM model, expected return = risk free rate + beta*market risk premium

Q: A stock has a required return of 16%, the risk-free rate is 5.5%, and the market risk premium is 4%.…

A: A model that represents the relationship of the required return and beta of a particular asset is…

Q: A stock has an expected return of 11 percent, its beta is 1.20, and the risk-free rate is 4.4…

A: Formula to Calculate the Expected Equity Return as belowExpected Equity Return = Risk Free return +…

Q: he risk-free rate of return is 1 percent, and the expected return on the market is 8.7 percent.…

A: Shares are valued using a method called the dividend discount model. This model is based on the…

Q: Beale Manufacturing Company has a beta of 1.6, and Foley Industries has a beta of 0.55. The required…

A: The capital assets pricing model is a technique that helps to compute the required rate of return on…

Q: A stock's beta is 1.5 and the market risk premium is 5.6%.  If the risk-free rate is 2.9%, what is…

A: The CAPM model refers to the relation between the systematic risk and the return of the stock. It is…

Q: Centex Energy has a beta of 1.47. Assume that risk-free rate and the expected rate of return on the…

A: CAPM capital assets pricing model gives the required rate of return based on the risk involved in…

Q: Paycheck, Inc. has a beta of 1.02. If the market return is expected to be 16.90 percent and the…

A: Risk Premium: It characterizes to the additional return over the risk free rate that an investor…

Q: A stock has an expected return of 12.7 percent, its beta is 1.80, and the risk-free rate is 3.2…

A:

Q: $

A: Portfolio Beta = Sum of [ Weight * beta ]

Q: An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The risk-free rate…

A: As per two factor APT model,Required return =Rf+[bi1∗(r1−Rf)]+[bi2∗(r2−Rf)]whereRf = risk free rate…