Please give me true answer this financial accounting question SUMMIT CAPITAL INVESTMENTS HAS AN ASSET WITH ABETA OF 1.5, A RISK-FREE RATE OF 3.9%, AND A MARKETRETURN OF 11.8%.WHAT IS THE EXPECTED RETURN ON THE ASSET?A. 15.75%B. 21.17%C. 11.29%D. 13.23%

Step 1: Definition of Expected Return (CAPM Model)The expected return in the Capital Asset Pricing…

Answered: SUMMIT CAPITAL INVESTMENTS HAS AN ASSET…

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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Calculate the expected return on the asset on these financial accounting question
The expected market return is 5%. The risk-free rate is 3%. According to the CAPM equation, what is the expected return on an asset which has alpha=1.5%, and beta=1.9 ? O a. 11.0% O b. 5.3% O c. 5% O d. 6.8% O e. 8.3%
Financial Accounting
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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%
d) The return on the risk-free asset is 5%. You are given the following information: Security E(R) -% Firm A Firm B Firm C 10 14 16 Market portfolio 12 SD-% 31 ? 65 20 Correlation with Market portfolio ? .50 .35 1 Beta .85 1.40 ? 1 i) What is the correlation between security A and the market portfolio? ii) What is the standard deviation of security B? iii) What is the beta of security C? Give an interpretation of its value? iv) Is the stock of Firm A correctly priced according to the capital asset pricing model (CAPM)? What about the stock of Firm C? If these securities are not correctly priced, what is your investment recommendation for someone with a well-diversified portfolio?
Please try to give correct answer this financial accounting question
The risk-free rate of return is 2.5% and the market risk premium is 8%. Rogue Transport has a beta of 2.2. Using the capital asset pricing model, what is Rogue Transport's cost of retained earnings? a.20.1% b.19.6% c.17.7% d.16.4%

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SUMMIT CAPITAL INVESTMENTS HAS AN ASSET WITH A BETA OF 1.5, A RISK-FREE RATE OF 3.9%, AND A MARKET RETURN OF 11.8%. WHAT IS THE EXPECTED RETURN ON THE ASSET? A. 15.75% B. 21.17% C. 11.29% D. 13.23%