(Related to Checkpoint 8.3) (Systematic risk and expected rates of return) The following table. contains beta coefficient estimates for six firms. Calculate the expected increase in the value of each firm's shares if the market portfolio were to increase by 10 percent. Perform the same calculation where the market drops by 10 percent. Which set of firms has the most variable or volatile stock returns? C Input the expected increase in the value of each firm's shares if the market portfolio were to increase by 10%. (Round each answer to two decimal places.) Company Microsoft Money Central (MSN.com) Beta Estimate Expected Increase Computers and Software Apple Inc. (AAPL) 2.58 ☐ % Dell Inc. (DELL) 1.38 Hewlett Packard (HPQ) 1.41 % Utilities American Electric Power Co. (AEP) 0.79 Duke Energy Corp. (DUK) 0.39 0.77 1% % Centerpoint Energy (CNP) Input the expected decrease in the value of each firm's shares if the market portfolio were to decrease by 10%. (Round each answer to two decimal places.) Company Microsoft Money Central (MSN.com) Expected Decrease Beta Estimate Computers and Software Apple Inc. (AAPL) 2.58 % Dell Inc. (DELL) 1.38 % Hewlett Packard (HPQ) 1.41 % Utilities American Electric Power Co. (AEP) 0.79 1% Duke Energy Corp. (DUK) 0.39 % Centerpoint Energy (CNP) 0.77 Which set of firms has the most variable or volatile stock returns? (Select the best choice below.) Utilities
(Related to Checkpoint 8.3) (Systematic risk and expected rates of return) The following table. contains beta coefficient estimates for six firms. Calculate the expected increase in the value of each firm's shares if the market portfolio were to increase by 10 percent. Perform the same calculation where the market drops by 10 percent. Which set of firms has the most variable or volatile stock returns? C Input the expected increase in the value of each firm's shares if the market portfolio were to increase by 10%. (Round each answer to two decimal places.) Company Microsoft Money Central (MSN.com) Beta Estimate Expected Increase Computers and Software Apple Inc. (AAPL) 2.58 ☐ % Dell Inc. (DELL) 1.38 Hewlett Packard (HPQ) 1.41 % Utilities American Electric Power Co. (AEP) 0.79 Duke Energy Corp. (DUK) 0.39 0.77 1% % Centerpoint Energy (CNP) Input the expected decrease in the value of each firm's shares if the market portfolio were to decrease by 10%. (Round each answer to two decimal places.) Company Microsoft Money Central (MSN.com) Expected Decrease Beta Estimate Computers and Software Apple Inc. (AAPL) 2.58 % Dell Inc. (DELL) 1.38 % Hewlett Packard (HPQ) 1.41 % Utilities American Electric Power Co. (AEP) 0.79 1% Duke Energy Corp. (DUK) 0.39 % Centerpoint Energy (CNP) 0.77 Which set of firms has the most variable or volatile stock returns? (Select the best choice below.) Utilities
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
quiz 8-5
Transcribed Image Text:(Related to Checkpoint 8.3) (Systematic risk and expected rates of return) The following table. contains beta coefficient estimates for six firms. Calculate the expected increase in the value of each firm's shares if the market portfolio were to increase by 10 percent. Perform the same
calculation where the market drops by 10 percent. Which set of firms has the most variable or volatile stock returns?
C
Input the expected increase in the value of each firm's shares if the market portfolio were to increase by 10%. (Round each answer to two decimal places.)
Company
Microsoft Money
Central (MSN.com)
Beta Estimate
Expected Increase
Computers and Software
Apple Inc. (AAPL)
2.58
☐ %
Dell Inc. (DELL)
1.38
Hewlett Packard (HPQ)
1.41
%
Utilities
American Electric Power Co. (AEP)
0.79
Duke Energy Corp. (DUK)
0.39
0.77
1%
%
Centerpoint Energy (CNP)
Input the expected decrease in the value of each firm's shares if the market portfolio were to decrease by 10%. (Round each answer to two decimal places.)
Company
Microsoft Money
Central (MSN.com)
Expected Decrease
Beta Estimate
Computers and Software
Apple Inc. (AAPL)
2.58
%
Dell Inc. (DELL)
1.38
%
Hewlett Packard (HPQ)
1.41
%
Utilities
American Electric Power Co. (AEP)
0.79
1%
Duke Energy Corp. (DUK)
0.39
%
Centerpoint Energy (CNP)
0.77
Which set of firms has the most variable or volatile stock returns? (Select the best choice below.)
Utilities
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