beta is 1, what is the likely result of a 2 per cent increase in the market index return?  A) A 2 per cent increase in the return on a specific share. B) A 2 per cent decrease in the return on a specific share. C) A 0.5% decrease in the return on a specific share. D) A 0.5% increase in the return on a specific share.

Q: Suppose that the PSE composite index will move from 3,500 to 4,266 and rate for T-bills is 5%.  The…

A: The market return of the stock can be calculated by the changes in index. and this market return…

Q: if stock 1 provides 10% rate of return and stock 2 expects 30% rate of return. what can we say about…

A: The efficient market hypothesis is the market theory that is very prominent in investment strategies…

Q: What does a share’s beta of 1.5 mean? Is this share more or less volatile than the market? Explain…

A: a) Beta of a stock is used to determine its volatility with respect to the market. A stock which is…

Q: What can be concluded about the value of Company’s beta (β), if one per cent change in the market…

A: Beta is the measure of stock volatility in relation to the volatility in the market. Higher the beta…

Q: If beta of Asian Paints is 0.6, the expected return from Asian Paints is 13 %, and the alpha of…

A: Given: Expected return = 13% Beta = 0.6 Alpha = 1%

Q: If the market return is 10%, the expected return from SBI is 16 %, and the alpha of the SBI is 2%,…

A: Market return = 10% Expected return = 16% Alpha = 2%

Q: 11) Suppose that a company has just paid a dividend of $1.50 per share. Dividends are expected to…

A: Dividend : $1.50Growth rate : 4%Market risk premium : 3%Risk-free rate : 4%Variance of the market…

Q: Suppose 6%, 11%, and b₁ = 1.3. a. What is n, the required rate of return on Stock I? Round your…

A: The Capital Asset Pricing Model (CAPM) is a financial tool used to estimate the expected return on…

Q: Suppose that Company ABC has a beta of .92.  The expected return on the market is 13% and the market…

A: Market return (Rm) = 0.13Market risk premium (Mp) = 0.102Beta of the stock (b) = 0.92Expected return…

Q: The following table is an analyst's best guess for the likelihood of various states of the economy…

A: Economy Probability (%) Ideal 0.2 20.0 Good 0.4 15.0 Fair 0.3 8.0…

Q: Suppose your expectations regarding the stock market are as follows: State of the Economy Boom…

A: Mean provides a central point around which data points tend to cluster. This makes it a useful…

Q: The risk-free return is 5%, Company x has a beta of 1.5 and an expected return of 20%. Calculate the…

A: Solution:- Capital Asset Pricing Model (CAPM) is an equity model which calculates the required rate…

Q: 8-8. What is the standard deviation of returns for the following stock? State Boom Normal Bust…

A:

Q: articular share, a 1 per cent change in the market index return generally leads to a return of less…

A: Beta of stock is related to overall risk of firm and risk that is related to overall market. This is…

Q: Suppose rRF = 4%, rM = 9%, and bi = 1.5. What is ri, the required rate of return on Stock i? Round…

A: Here,rRF  is 4%rM is 9%bi is 1.5

Q: hat would the expected annual return

A: The Capital Asset Pricing Model (CAPM) was developed by William F. Sharpe. The expected return and…

Q: the actual rates of change were 6% for IP and 2% for INT respectively, What is your best guess for…

A: The required rate of return  is the lowest rate of return an investor would take in exchange for a…

Q: What is the beta of a stock with an expected return of 106, if Treasury bills yield 4% and the…

A: Financial management consists of directing, planning, organizing and controlling of financial…

Q: The current risk-free rate of return in the economy is 6%, in addition, the market rate of return is…

A: Expected rate of return is the profit to achieved by investing in a particular stock or bonds. CAPM…

Q: 9. Return and Standard Deviations. Consider the following information: Rate of Return if State…

A:

Q: Assuming that the expected market return [E(Rm)] is 11% and the risk-free rate of return (Rf) is 8%,…

A: The cost of equity refers to the required rate of return that is expected from the investment. It is…

Q: REQUIRED RATE OF RETURN Suppose rr = 9%, ry = 14%, and b, = 1.3. a. What is r, the required rate of…

A: Required rate of return on Stock i- Ri = rrF + bi(rM – rrF) = 0.09 + 1.3 x (0.14 – 0.09) = 0.1550 or…

Q: According to what I read in a financial time reports market efficient 4 hypothesis implies that the…

A: The efficient market hypothesis states that the financial markets are efficient in terms of…

Q: Assume that the CAPM holds, and refer to the graph below. What is the correlation between stocks B…

A: Here's a detailed explanation for better understanding. To find the correlation between stocks B and…

Q: The market volatility is 25%. Firm A and Firm B have volatilities of 50.1% and 24.8%, respectively.…

A: The beta of a stock refers to the measure of systematic risk that the company faces. It is used in…

Q: b) Calculate the variance and standard deviation.

A: Calculation of expected return Probability Return Expected return A B C=A*B 30% -13% -3.90%…

Q: 5. Given the following expectations for the next year, what is the expected return, standard…

A: To determine the Expected Return, Standard Deviation and Beta of Stock A from the data. Return on…

Q: The following four factors were identifies and later used to explain the return on a stock and level…

A: An asset's returns can be forecasted using the linear relationship between the asset's expected…

Q: Probabilities and possible returns of share X have been projected as below based on different…

A: a) Calculation of expected return Probability Return Expected return X Y Z=X*Y 30% -13%…

Q: The expected return on Share X is 15.75% while the risk-free rate of return is 7%. If the expected…

A: Expected return =Rf + beta * ( Rm- Rf) Rf = Risk free rate Rm =Expected return on market

Q: Assume that the risk-free rate is 6% and the required return on the market is 10%. What is the…

A: The formula used as follows: Required rate of return=rRF+Beta rM-rF

Q: Kaiser Aluminum has a beta of 0.70. If the risk-free rate (RRF) is 5.0%, and the market risk premium…

A: The Capital Asset Pricing Model implies the rate of return on any security equals the risk less rate…

Q: Suppose nu=5%, TH=13%, and b₁ = 1.9. a. What is n, the required rate of return on Stock I? Round…

A: CAPM model is one of the model that investors have used for determining the cost of equity or the…

Q: uppose 5%, TH 13%, and by-1.9. a. What is n, the required rate of return on Stock I? Round your…

A: Rf = 5%Rm = 13%Beta = 1.9

Q: 6. The rate of return on the common stock of ATEEZ is expected to be 12 percent in a boom economy…

A: LetX : Return of the common stock in percentP(boom) = 0.30P(normal)=1-P(boom)=1-0.30=0.70Now Pmf of…

Q: 4. Assume that the risk-free rate is 5% and the expected return on the market is 12%. What is the…

A: In the given question we are required to calculate required rate of return of stock using given…

Q: A stock has the following four factors which were used to explain the return on Stock YGF and the…

A: Expected return on stock using asset pricing theory(APT) is calculated using following equation…

Q: Given the following information, what is the expected return and standard deviation for this stock?…

A: In the given case, the probability and the rate of return of each state of economy . Expected return…

Q: The average return for the line is %. (Enter as a percentage and round to two decimal places.)

A: Average Return: The average return is computed by summing the product of the security probability…

Q: 3. Assume that the market is in equilibrium and that stock betas can be estimated with historical…

A: Variables in the question:Let us denote return on United Fund (UF) =XLet us denote return on…

Q: If the average range of the market’s return (as measured by the S&P 500) is +/- 9% for a given…

A: An investor's expected return is the typical return they anticipate from a particular investment…

Q: Suppose rRF = 4%, rM = 11%, and bi = 1.5. What is ri, the required rate of return on Stock i? Round…

A: Given information Risk-free rate=4% Expected Return of the market =11% bi=1.5 In Part 2 Risk-free…

Q: beta of OGDCL is reduced to 0.8%, the return on OGDCL will.         a.Increase         b.No change…

A:

Q: 26. The risk-free rate of return is currently 3.5 percent, whereas the market risk premium is 9…

A: in the given problem we are required to calculate expected return on Base Inc, with following data,…

Q: a. If the market return increased by 13​%, what impact would this change be expected to have on the​…

A: Capital asset pricing model (CAPM) is a model or method which is used by the company to define the…

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.