(i) Potpuri Inc Stock has a beta of 1.7 and an expected return of 16.7% under CAPM. What is the expected market risk premium of Potpuri Inc. (ii) Magnolia Ind stock has the beta of 0.8 what is the expected return on the Magnolia Ind?

Q: CAPM Elements Risk-free rate (RF) Market risk premium (RPM) Happy Corp. stock's beta Required rate…

A: The capital asset pricing model aids analysts and investors in calculating the expected return on…

Q: The risk-free rate is 5.6%, the market risk premium is 8.5%, and the stock's beta is 2.27. What is…

A: Following details are given in the question: Risk free rate = 5.6% Market Risk premium = 8.5%…

Q: Industry stock has a beta of 1.8, the risk-free rate is 4.40%, and the market risk premium (MRP) is…

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

Q: Stock Y has a beta of 1.30 and an expected return of 13.0%. Stock Z has a beta of .75 and an…

A: We will calculate the expected return using the Capital Asset Pricing Method and then compare with…

Q: Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 8.50%, and the risk-free…

A: Fiske Roofing Supplies stock has beta 1.23, required return is 8.50% risk free rate is 4.30% , then…

Q: jerilu markets has a beta of 1.23 the risk free rate of return is 2.10 percent and the market rate…

A: Step 1 The investment return that an asset is anticipated to generate over and above the risk-free…

Q: erilu Markets has a beta of 1.46. The risk-free rate of return is 2.98 percent and the market rate…

A: Risk premium = Beta(market return - risk free rate)

Q: Based on the CAPM model, what should be the expected return for a stock with a beta of 2.1 when the…

A: The Capital Asset Pricing Model (CAPM) is used to calculate the expected return of a stock based on…

Q: Calcitron Inc. has common stock with a beta of 1.4. The risk-free rate is 3.7 while the market rate…

A: Required rate is rate which is expected by investors and can be calculated based on the risk…

Q: Assume the following information about the market and Lithium Motors Stock.​ Lithium's beta​ = 1.80,…

A: Beta (b) = 1.80 Risk free rate (Rf) = 0.025 Market risk premium (Mp) = 0.08 Expected return = ?…

Q: JaiLai Cos. stock has a beta of 0.8, the current risk-free rate is 6.2 percent, and the expected…

A: The provided information are: Beta = 0.80 Expected return = 12% Risk free rate = 6.2%

Q: Assume that the risk-free rate is 3.6% and the market risk premium is 4%. What is the required rate…

A: Risk-Free Rate = 3.6%Market Risk Premium = 4%Beta = 1.4

Q: A stock has a beta of 1.38. The risk free rate is 0.817% and the market risk premium is 5%. What is…

A: Solution:- Capital Asset Pricing Model (CAPM) is the model which helps to compute the fair return on…

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: Cooley Company's stock has a beta of 0.8 , the risk-free rate is 1.04 %, and the market risk premium…

A: The Capital Asset Pricing Model (CAPM) refers to the model which tells us how the financial markets…

Q: es Stock Y has a beta of 1.5 and an expected return of 16.1 percent. Stock Z has a beta of 1 and an…

A: Step 1:It shows the excess return generated per unit of systematic risk. Excess return implies…

Q: The stock of Wiley United has a beta of 0.92. The market risk premium is 8.6% and the risk-free rate…

A: Given the following information: Beta: 0.92 Market risk premium: 8.6% Risk free rate: 2.2%

Q: The risk-free rate of return is 2.5%, the required rate of return on the market is 11.5%, and ABC…

A: The Capital Asset Pricing Model (CAPM) is the model which shows the relationship between the…

Q: The risk-free rate of return is 3.75 percent and the market risk premium is 6.5 percent. What is the…

A: Risk free rate of return = rf = 3.75% Market risk premium = mrp = 6.5% Beta = b = 0.84

Q: The following graph plots the current security market line (SML) and indicates the return that…

A: 1.)Rf will also be 2 percent higher if the inflation rate increases by 2 percent. We also know that…

Q: The risk-free rate of return is currently 0.03, whereas the market risk premium is 0.04. If the beta…

A: Following details are given in the question: Risk free rate of return = 0.03 = 3% Market Risk…

Q: The risk-free rate is 5.6%, the market risk premium is 8.5%, and the stock's beta is 2.27. What is…

A: The question can be answered by determining the required rate of return on the stock using the…

Q: Suppose intel stock has a beta of 0.80, whereas Boeing stock has a beta of 1.15. If the risk-free…

A: Intel Beta = ib = 0.89 Boeing Beta = bb = 1.15 Risk free rate = rf = 3.1% Market return = rm = 10.1%

Q: AmDa’s common stock has a beta of 1.4. The market risk premium is 5% and the riskfree rate is 2%.…

A: Given:Beta of AmDa's =1.4Market risk premium = 5%Risk free rate = 2%We have to compute the required…

Q: Suppose the market portfolio has an expected return of 9% and a volatility of 18.5%. YMH stock…

A: Sharpe ratio shows the risk adjusted performance of the stock based on risk free rate and volatility…

Q: What must the expected return on the market be?

A: Introduction: The expected return of market is considered to be an important concept because it is…

Q: A stock has an expected return of 13.4 percent and a beta of 1.15, and the expected return on the…

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

Q: Suppose the risk free rate is 2, 32%, the expected return of the market portfolio is 5, 64% and the…

A: We will use the CAPM model here. CAPM stands for Capital Asset Pricing Model. This is an important…

Q: If the expected return from the market is 18%, the risk-free rate is 11%, and the beta of Loschert…

A: The term beta of a stock represents the responsiveness of a particular stock in relation to the…

Q: A stock has an expected return of 13.1%, its beta is 1.70, and the risk free premium rate is 2.6%.…

A: In the given question we require to calculate the expected return on market from the following…

Q: The risk-free rate is 1.45% and the market risk premium is 5.21%. According to the Capital Asset…

A: Capital assets pricing model gives the expected rate of return from the stock based on the risk…

Q: JaiLai Cos. stock has a beta of 0.7, the current risk-free rate is 6.1 percent, and the expected…

A: CAPM model provides formula that calculates the expected return on stock based on its level of risk.…

Q: If the risk-free rate of return, rRF İS 4% and the market return, rM is expected to be 12%, what is…

A: Details given in the question are as follows: Risk free rate (rRF) = 4% Market Return (rM) = 12%…

Q: Suppose that the risk-free rate is 3% and the market risk premium is 8%. According to the CAPM,what…

A: The capital asset pricing model is the tool used to analyze the relationship between the risk and…

Q: Spider Corp has a beta of 1.7. The risk-free rate is 1.6% and the market risk premium is 5.2% .(Note…

A: Following details are given in the question regarding Spider Corp: Beta = 1.7 Risk free rate = 1.6%…

Q: Mulherin's stock has a beta of 1.34, its required return is 8.33%, and the risk-free rate is 2.30%.…

A: Beta = b = 1.34Required Return = r = 8.33%Risk free rate = rf = 2.30%

Q: The risk-free rate is 2.58% and the market risk premium is 4.31%. A stock with a β of 1.22 will have…

A: Introduction: The term expected return refers to the anticipated loss or gain by an investor from…

Q: Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 10.00%, and the risk-free…

A: Market risk premium is calculated using following equation Market risk premium = Required return on…

Q: EXL's stock has a Beta of 1.6 and an Expected Return of 20%. The risk-free rate is equal to 4.0%.…

A: We need to use the Capital Asset Pricing Model (CAPM) to find out the market risk premium i.e.…

Q: A company's stock has a beta of 1.20, the risk-free rate is 1.6%, and the market risk premium is…

A: We will have to apply the CAPM model here. CAPM is the capital asset pricing model.

Q: FIN300 Inc's stock has an expected return of 12.25%, a beta of 1.25, and is in equilibrium. If the…

A: Capital Asset Pricing Model (Expected Return) = R* + (Rm-R*)B Where Expected Rate of Return = 12.25%…

Q: A stock has a beta of 1.5 and an expected return of 16.35%. What is the risk-free rate if the market…

A: We will use and apply the CAPM model here. CAPM stands for Capital Asset Pricing Model. This model…

Q: Cooley Company's stock has a beta of 1.05, the risk-free rate is 2%, and the market risk premium is…

A: Required rate of return = CAPM = Risk free rate  + Market risk premium * beta

Q: A stock has a beta of 1.1. The expected return on the market is 6.18 percent and the risk free rate…

A: Expected Return = Risk Free Rate + Beta ×Market Return -Risk Free Rate Risk Free Rate is 2% Beta is…

Q: A stock has an expected return of 11.25 percent, a beta of 0.82, and the expected return on the…

A: Capital asset pricing model is used to compute the expected return from a stock: Here, Expected…