Question 15: You're half-way through preparing the following table of CAPM betas and expected returns: Asset Government bonds ASX200 ETF Westpac Ltd (WBC) CSL Ltd Beta ? ? 0.82 0.21 Expected return pa 0.04 0.1 ? ? Which of the below statements is NOT correct? (a) Government bonds have a zero beta. (b) The ASX200 market portfolio has a beta of one. (c) Westpac's expected return is 8.92% pa (d) CSL's expected return is 5.26% pa. (e) If the ASX200 were to fall by 10% today, government bonds would be expected to fall 4%.
Question 15: You're half-way through preparing the following table of CAPM betas and expected returns: Asset Government bonds ASX200 ETF Westpac Ltd (WBC) CSL Ltd Beta ? ? 0.82 0.21 Expected return pa 0.04 0.1 ? ? Which of the below statements is NOT correct? (a) Government bonds have a zero beta. (b) The ASX200 market portfolio has a beta of one. (c) Westpac's expected return is 8.92% pa (d) CSL's expected return is 5.26% pa. (e) If the ASX200 were to fall by 10% today, government bonds would be expected to fall 4%.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Question 15: You're half-way through preparing the following table of CAPM betas and
expected returns:
Asset
Government bonds
ASX200 ETF
Westpac Ltd (WBC)
CSL Ltd
Beta
?
?
0.82
0.21
Expected return
pa
0.04
0.1
?
?
Which of the below statements is NOT correct?
(a) Government bonds have a zero beta.
(b) The ASX200 market portfolio has a beta of one.
(c) Westpac's expected return is 8.92% pa
(d) CSL's expected return is 5.26% pa.
(e) If the ASX200 were to fall by 10% today, government bonds would be expected to fall
4%.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step 1: Part a - Government bonds have a zero beta.
VIEWStep 2: Part (b) The ASX200 market portfolio has a beta of one.
VIEWStep 3: (c) Westpac's expected return is 8.92% pa.
VIEWStep 4: (d) CSL's expected return is 5.26% pa.
VIEWStep 5: (e) If the ASX200 were to fall by 10% today, government bonds would be expected to fall 4%.
VIEWSolution
VIEW
Step by step
Solved in 6 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education