D1 = $1.25, g = 6.00%, β = 1.15, market risk premium = 5.5%, and risk free rate = 4 %.  Find the stock price $28.90 $28.62 $29.36 $30.12

Q: f four stocks A, B, C and D have coefficients of variation of 1.80, 2.00, 1.55 and 1.35,…

A: Coefficient of Variation(CV) measures the risk per unit of return.Coefficient of Variation(CV)  =…

Q: 8.4   Assume that the risk-free rate is 3% and the market risk premium is 4%. What is the…

A: Required Rate is the least return that is anticipated by an investor on any security. It is…

Q: Suppose TRF = 5%, TM12%, and b = 2, what is r, the required rate of return on Stock i? 12% 7% 19% 5%…

A: According to Capital Asset Pricing model ,Ri = Rf + [b * (Rm-Rf) ]whereRi = Required rate of return…

Q: Portfolio Rp Op 12% 29% 1.25 Y 11 24 1.10 8 14 .75 Market 10 19 1.00 Risk-free 4 0 0

A: Sharpe Ratio= Expected Return-Risk free rate /Standard Deviation   Treynor Ratio= Portfolio…

Q: Q2: By using CAPM calculate the required return on equity if Risk free rate is 18%, Expected Market…

A: Given Information: Risk-free Rate=18% Beta=1.5 Expected Market Return=20%

Q: Beta for Stock Y given the Expected Return of Stock Y is 20.4% The expected return on the Market…

A: The given problem can be solved using Capital asset pricing model.

Q: What is the CAPM required return for Stock Z, in decimal form? Round your answer to 4 decimal places…

A:

Q: stock expected return beta a 9.01% 1.7 b 7.06% 0.0 c 5.04% 0.67 d 8.74% 0.87 e 11.5%…

A: Risk free rate = 7% Market risk premium = 2%

Q: Find the Expected Return on the Market Portfolio given that the Cost of Equity is 14% and Risk-Free…

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

Q: Consider stocks with the following statistics: Return and Volatility Asset Expected Return…

A: Sharp ratio Sharp ratio is calculated as shown below.          Sharp ratio=Portfolio return-Risk…

Q: If D0 = $2.25, g (which is constant) = 3.6%, and P0 = $50.00, then what is the stock's expected…

A: Cost of equity capital is also known as KE. It is the cost which is incurred by the company for…

Q: Please help me with 11-5 ??‍♀️

A:

Q: If Do = $2.25, g (which is constant) = 3.5%, and Po= $44, what is the stock's expected dividend…

A: Current price of stock is the price which can be paid for purchase of the stock. It is also called…

Q: What is the expected return for the following portfolio? (State your answer in percent with two…

A: The question is related to Expected Return of Portfolio. The expected return of Portfolio is…

Q: Use the information below to answer the question 52WHi 52WLo Ticker Div Yield% P/E Vol 00s High Low…

A: Dividend yield = Dividend / Close price of stock.1.34% = 0.65 /Close price of stock.Close price of…

Q: Required: Calculate expected intrinsic price of stock

A: expected intrinsic price of stock =FV/ (1+i)n FV  Refers to Future Value i refers to Rate of…

Q: You are given the following information for DEF Company. What is the stock's beta? • Expected return…

A: ER = expected return ER = RF +;BETA ( RM - RF)  RF = RISK FREE RATE  RM = RETURN OF MARKET  RM - RF…

Q: invest 40% in A and 60% in B, what would be the return standard deviation of your portfolio? Enter…

A: First we need to find the standard deviation of individual stocks and their correlation co-efficient…

Q: D1 = $0.75, rs = 10.5%, g = 6.4%.  Calculate the stock price. $18.39 $18.84 $18.29 $17.75

A: P0 =D1 /(ke-g)

Q: The market portfolio has an excess return of 8% and volatility of 15%. The risk free rate is 5%.…

A: Minimum required return (CAPM) = Rf+ [β×(Rm-Rf)]

Q: Consider 3 stocks A, B, and C and the risk-free rate RF-0.5%. The logarithmic rates of return are as…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: Beta 0.53 Risk-free 0.7% MRP 5.55% Rate Given the data in the table, what is the stock's risk…

A: Risk free rate = 0.7% Market return = 5.55% Beta = 0.53

Q: I will have info on 2 portfolios and the market benchmark, and you will calculate the CAPM = Rf +…

A: The question gives the following information:

Q: State Dep Rec Norm Boom Prob 0.1 0.3 0.4 0.2 Stock A Return A -0.25 0.12 0.33 0.42 Stock B Return B…

A: Portfolio Return is that when the investor will invest the amount in more than one stock of…

Q: What is the formula for Price to Book Value ( MV/BV) ratio ? If Current Price = 126, Total Equity =…

A: The “Price/Book Value” Ratio (P/BV) is calculated by dividing the price of a share of stock by the…

Q: Suppose that put options on a stock with strike prices $30 and $35 cost $4 and $7, respectively.…

A: The bull spread would use a strike price of $35 and cost C1 $7 by writing put option and buy put…

Q: 4 of stion Determine the market value of a Digicel Stock if Do = 3.00, K₂= 13%, G = 6%. Select one:…

A: D0=$3Growth rate=6%Cost of equity (Ks)=13%

Q: Calculate the expected return of the following information of Bader stock State 1 3 Probability 0.20…

A: Using excel

Q: Expected Return on the market HPR Beta Risk-free rate Stock ABC 15.68% 1.2 1% 6.68% What is the…

A: Alpha is the abnormal return which the investors get and is above the equilibrium or expected return…

Q: a 0.07248 b. 0.00386 0.26921

A: Portfolio management is the process of selecting, prioritising, and controlling an organization's…

Q: The risk-free rate is 2.59% and the market risk premium is 7.64%. A stock with a β of 1.28 will have…

A: CAPM stands for Capital Asset Pricing Model which indicates the relation between the expected…

Q: 2. Capital Asset Pricing Model Risk-free rate : 2.5% Market rate of return: 8.5% Beta: .90 Using the…

A: In the given question we are required to calculate the risk of the stock using Capital asset pricing…

Q: 8. (Portfolio of two stocks) The following spreadsheet presents data for stocks A and B. A B C 1 2…

A: Step 1:The return of portfolio is the weighted average return of Stock A and Stock B. Standard…

Q: Expected return is Probability Stock Retun 0.3 0.06 0.55 0.15 0.15 0.18

A: The given table is: Probability Stock Return 0.3 0.06 0.55 0.15 0.15 0.18

Q: Suppose rRF = 9%, rM = 14%, and bi = 1.3. %3D · What is ri, the required rate of return on Stock i?

A: In the given question we are required to compute the required rate of return (ri) of stock i.…

Q: What is Stock X's geometric returns if it has the following returns? Year 1 8% Year 2 - 5% Year 3…

A: Let the geomatric return be r.=>(1+r)^5= (1+0.08)(1-0.05)(1+0.10)(1-0.06)(1+0.15).

Q: E(rs) 10 eight in stocks WS -0.1 0.0 0.1 0.2 0.3 0.4 0.6 0.8 1.0 1.1 E(1 B) 5 Portfolio expected…

A: First, I'm going to list the formula used and then solve them in excel. Portfolio expected return =…

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: An investment of P100,000 is expected to yield a regular annual net income of P25000 for 10 years.…

A: A benefit-cost ratio (BCR) is a ratio used in a cost-benefit analysis to summarize the overall…

Q: find the stock return

A: The constant growth model is a method for valuing the share price of a stock. It calculates the…

Q: A stock has a required return of 11%, the risk-free rate is 7%, and the market risk premium is 4%.…

A: Required return = risk free rate + beta*market risk premium 11 = 4 + beta*7

Q: You have a portfolio which consists of 75% of stock 1 (o^2 = 0.16) and 25% of stock 2 (o^2 = 0.09).…

A: Return on the stock is based on the risk free rate, market return and the risk associated with the…

Q: Find the Expected Return on the Market Portfolio given that the Cost of Equity is 14% and Risk-Free…

A: The capital asset pricing model is the model of valuing the required rate of return of a stock an…

Q: D0 = $2, g = 5%, P0 = $30, find the stock return 10% 11% 12% 13%

A: As per Dividend Discount Model, P0= D1 / (ke-g) Where D1 = Expected Dividend ke = Expected Return g…

Q: If D, = S1.75, g (which is constant) = 3.6%, and P. =$40.00, what is the stock's expected total…

A: A model that helps to evaluate the value of the stock with the assumption that the dividend will…

Q: only  typed answer Stock A's stock has a beta of 1.30, and its required return is 15.25%. Stock B's…

A: STEP 1 MRP stands for Market Risk Premium The difference between the anticipated return on a market…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.