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Suppose that the Treasury bill rate is 5% rather than 2%. Assume the expected retun on the market stays at 9%. Use the following Information. Stock Beta (B) LUnited States Steel 3.02 Amazon 1.46 Southwest Airlines 1.34 1.25 The Travelers Companies Tesla 0.95 ExxonMobll 0.83 Johnson & Johnson 0.82 Coca-Cola 0.69 Consolidated Edison 0.12 Newmont 0.10 a. Calculate the expected retum from Johnson & Johnson. (Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) b. Find the highest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) c. Find the lowest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) d. Would U.S. Steel offer a higher or lower expected return If the Interest rate were 5% rather than 2%? Assume that the expected market return stays at 9%.

Suppose that the Treasury bill rate is 5% rather than 2%. Assume the expected retun on the market stays at 9%. Use the following Information. Stock Beta (B) LUnited States Steel 3.02 Amazon 1.46 Southwest Airlines 1.34 1.25 The Travelers Companies Tesla 0.95 ExxonMobll 0.83 Johnson & Johnson 0.82 Coca-Cola 0.69 Consolidated Edison 0.12 Newmont 0.10 a. Calculate the expected retum from Johnson & Johnson. (Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) b. Find the highest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) c. Find the lowest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) d. Would U.S. Steel offer a higher or lower expected return If the Interest rate were 5% rather than 2%? Assume that the expected market return stays at 9%.

Essentials Of Investments
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
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Suppose that the Treasury bill rate is 5% rather than 2%. Assume the expected return on the market stays at 9%. Use the following Information. Stock Beta (B) 3.02 LInited States Steel 1.46 1.34 Аmazon Southwest Alrlines The Travelers Companies Tesla 1.25 0.95 ExxonMobil e.83 Johnson & Johnson 0.82 Coca-Cola e.69 Consolidated Edison 0.12 Newmont 0.10 a. Calculate the expected return from Johnson & Johnson. (Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) b. Find the highest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) C. Find the lowest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) d. Would U.S. Steel offer a higher or lower expected retum If the Interest rate were 5% rather than 2%? Assume that the expected market return stays at 9%. e. Would Coca-Cola offer a higher or lower expected return if the Interest rate were 8%? a. Expected return b. Highest Expected return C. Lowest expected retum % d. Would U.S. Steel offer a higher or lower expected return? Would Coca-Cola offer a higher or lower expected return? е.
Transcribed Image Text:Suppose that the Treasury bill rate is 5% rather than 2%. Assume the expected return on the market stays at 9%. Use the following Information. Stock Beta (B) 3.02 LInited States Steel 1.46 1.34 Аmazon Southwest Alrlines The Travelers Companies Tesla 1.25 0.95 ExxonMobil e.83 Johnson & Johnson 0.82 Coca-Cola e.69 Consolidated Edison 0.12 Newmont 0.10 a. Calculate the expected return from Johnson & Johnson. (Do not round Intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) b. Find the highest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) C. Find the lowest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) d. Would U.S. Steel offer a higher or lower expected retum If the Interest rate were 5% rather than 2%? Assume that the expected market return stays at 9%. e. Would Coca-Cola offer a higher or lower expected return if the Interest rate were 8%? a. Expected return b. Highest Expected return C. Lowest expected retum % d. Would U.S. Steel offer a higher or lower expected return? Would Coca-Cola offer a higher or lower expected return? е.
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