Suppose the risk-free return is 4.6% and the market portfolio has an expected return of 11.1% and a standarddeviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.73. What is its expected return?The expected return is %. (Round to two decimal places.)

We can use the Capital Asset Pricing Model (CAPM) to calculate the expected return of Johnson &…

Answered: Suppose the risk-free return is 4.6%…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 14P: You have observed the following returns over time: Assume that the risk-free rate is 6% and the...

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Similar questions

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An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 3.2%, and the return on the HML portfolio (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = 20.4, and di = 1.3, what is the stock’s predicted return?
Suppose the risk-free return is 6.3% and the market portfolio has an expected return of 11.5% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.72. What is its expected return? The expected return is __ % ? (Round to two decimal places.)
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Suppose the risk-free return is 4.6% and the market portfolio has an expected return of 11.1% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.73. What is its expected return? The expected return is %. (Round to two decimal places.)