Suppose Autodesk stock has a beta of 2.16, whereas Costco stock has a beta of 0.69. If the risk-free interest rate is 4% and the expected return of the market portfolio is 10%, what is the expected return of a portfolio that consists of 60% Autodesk stock and 40% Costco stock, according to the CAPM?

Q: Suppose Autodesk stock has a beta of 2.30, whereas Costco stock has a beta of 0.68. If the risk-free…

A: Autodesk's beta=2.30 Autodesk's proportion in portfolio=60% Costco's proportion in portfolio=40%…

Q: Assume that expected return of the stock A in your portfolio is 14.6%. The risk premium on the…

A: CAPM is a financial model which shows the relation between risk and expected return of the…

Q: The risk- free rate is 5% and the expected return on the market portfolio is 13%. A stock has a beta…

A: The expected return can be computed by using the Capital asset pricing model (CAPM).  As per CAPM,…

Q: You have a required rate of return of 11.4%. If the current risk-free rate is 3%, and your stock has…

A: In this question we require to calculate the market risk premium. We can calculate market risk…

Q: The expected return on the market is 15% and the risk-free rate of return is 5%. If the Beta of the…

A: In given question we need to compute the expected rate of return for stock using CAPM.

Q: If the risk free rate is 6 %, the expected return on the market portfolio is 12% and the beta of…

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

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: The expected return for a stock, calculated using the CAP M is 10.5%. The market free return is 9.5%…

A: In the given question we are require to calculate the risk free rate : We can calculate the risk…

Q: A stock has an expected return of 10% and a beta of .9. If the risk-free rate is 4%, what is the…

A: The beta of the stock can be calculated as per the CAPM equation

Q: Suppose the risk-free rate is 8%. The expected return on the market is 16%. If a particular stock…

A: Capital Asset Pricing Model: This model explains the relationship between the expected return and…

Q: Suppose kraft Foods’ stock has a beta of 0.50, whereas Boeing’s beta is 1.25. If the risk –free rate…

A: Risk free rate (Rf) = 0.04 Market return (Rm) = 0.10   Expected return = ?

Q: Suppose Intel stock has a beta of 0.73, whereas Boeing stock has a beta of 1.3. If the risk-free…

A: As per guidelines we are supposed to answer only 3 sup-parts Expected return on each stock is…

Q: what is the stock's predicted return

A: Market return is 10%return on the SMB portfolio (rSMB) is 2.0 return on the HML portfolio (rHML) is…

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: Suppose the risk-free return is 6.3% and the market portfolio has an expected return of 11.5% and a…

A: The objective of the question is to calculate the expected return of Johnson & Johnson…

Q: Suppose Intel stock has a beta of 0.87​, whereas Boeing stock has a beta of 2.08. If the​ risk-free…

A: 1. The expected return of Intel stock, calculated using the Capital Asset Pricing Model (CAPM),…

Q: Suppose Intel stock has a beta of 0.84, whereas Boeing stock has a beta of 1.29. If the risk-free…

A: As per guideline, if more than 3 sub parts asked in a question. I can solve only the first 3…

Q: Suppose Intel stock has a beta of 0.88, whereas Boeing stock has a beta of 1.18. If the risk-free…

A: CAPM stands for capital asset pricing model. This model describes the relationship between expected…

Q: Annuity Present Value You are looking into an investment that will pay you $12,000 per year for the…

A: Present value is a financial concept that represents the value of a future sum of money in terms of…

Q: Stock Y has an expected excess return of 10% and its beta is 1.25. The Market portfolio expected…

A: Alpha measures the excess return of an investment compared to what would be expected given its risk,…

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: Calculate the Sharpe ratio, Treynor ratio, M-squared and Jensen's alpha for a stock with an expected…

A: 1) Sharp ratio = (Return of the portfolio - Return of Risk free investment) / Standard deviation of…

Q: Stock COOL has an expected return of 12.97 %. The expected market return is 11.72% and the risk-free…

A: Here,Expected Return is 12.97%Expected Market Return is 11.72%Risk Free Rate is 3.36%

Q: An analyst has modeled the stock of a company using the Fama-French three-factor model. The market…

A: Market return is 12% return on the SMB portfolio (rSMB) is 2.1%  return on the HML portfolio (rHML)…

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: Assume that the risk-free rate of return is 49% and the market risk premium (Le., Rm- R:) is 896. If…

A: Financial statements are statements which states the business activities performed by the company .…

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: Assume that expected return of the stock A in your portfolio is 14.6%. The risk premium on the…

A: CAPM is the relationship between systematic risk and returns for assets. This concept is used for…

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: An analyst has modeled the stock of a company using the Fama - French three - factor model. The…

A: The objective of the question is to calculate the predicted return of a stock using the Fama-French…

Q: Consider the CAPM. The risk-free rate is 6%, and the expected return on the market is 18%. What is…

A: In the given question we need to calculate the expected return on a stock using CAPM i.e. Capital…

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.…