I need this question answer general Accounting Consider an asset with a beta of 1.2, a risk-free rate of 4.49%, and a market return of12.4%.What is the expected return on assets?

This question requires the determination of the expected return on assets. The Capital Asset Pricing…

Answered: Consider an asset with a beta of 1.2, a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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General Accounting
Consider an asset with a beta of 1.2, a risk-free rate of 4.3%, and a market return of 12%. What is the reward-to-risk ratio in equilibrium? What is the expected return on the asset?
Calculate the required rate of return for an asset that has a beta of 1.53, given a risk-free rate of 3.6% and a market return of 9.2%. b. If investors have become more risk-averse due to recent geopolitical events, and the market return rises to 11.8%, what is the required rate of return for the same asset?
What is the equation for the Security Market Line? Define each term. If an asset has a beta of 2.0, what type of return should it realize compared to the market portfolio?
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Calculate the expected return on the asset on these financial accounting question
Assume that the risk-free rate, RF, is currently 9% and that the market return, rm, is currently 16%. a. Calculate the market risk premium. b. Given the previous data, calculate the required return on asset A having a beta of 0.4 and asset B having a beta of 1.8.
a. Calculate the required rate of return for an asset that has a beta of 1.8, given a risk-free rate of 5% and a market return of 10%.
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Find the required rate of return for an asset with beta of 0.90 when the risk free rate and market return are 8% and 12 % respectively. 2 ) Find the market rate of return for an asset with a required return of 16% and beta of 1.10.when the risk free rate is 9%
Suppose the risk-free rate is 5%. The expected return and standard deviation of a risky asset are 10% and 20%, respectively. a. What is the slope of the capital allocation line (CAL) constructed using the risk-free asset and the risky asset? A. 0.30 B. 0.15 C. 0.25 D. 0.20 b. If an investor has a risk aversion coefficient of A=2, what is the optimal fraction of the money that she invests in the risky asset? A. 62.5% B. 42.5% C. 30% D. 20% c. If an investor invest 25% of her money in the risky asset, which is the investor’s risk aversion coefficient? a. 5 b. 1 c. 3 d. 4
The expected rate of return of an investment ________. a. equals one of the possible rates of return for that investment b. equals the required rate of return for the investment c. is the mean value of the probability distribution of possible returns d. is the median value of the probability distribution of possible returns e. is the mode value of the probability distribution of possible returns

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Consider an asset with a beta of 1.2, a risk- free rate of 4.49%, and a market return of 12.4%. What is the expected return on assets?