that the CAPM is a good description of stock price returns. The market expected return is 7% with 11% volatility and the risk-free rate is 4%. New news arrives that does not change any of these numbers but it does change the expected return of the following stocks: Expected Return Volatility Beta Green Leaf 13% 22% 1.64 NatSam 10% 32% 1.61 HanBel 11% 29% 0.64 Rebecca Automobile 6% 30% 1.28 At current market prices, which stocks represent buying opportunities? On which stocks should you put a sell order in? Complete the table with the alphas below: (Round to one decimal plac
Assume that the
Expected Return Volatility Beta
Green Leaf 13% 22% 1.64
NatSam 10% 32% 1.61
HanBel 11% 29% 0.64
Rebecca Automobile 6% 30% 1.28
- At current market prices, which stocks represent buying opportunities?
- On which stocks should you put a sell order in?
Complete the table with the alphas below: (Round to one decimal place.)
Expected Return Volatility Beta Alpha
Green Leaf 13% 22% 1.64 %
NatSam 10% 32% 1.61 %
HanBel 11% 29% 0.64 %
Rebecca Automobile 6% 30% 1.28 %
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
