The rate of return on the U.S. government treasury bill is 0.03 and the expected rate of return on the Wilshire 5,000 is 0.08 . What is the required rate of return for a stock with a Beta 1.14?
Q: Last year, Mike bought 100 shares of Dallas Corporation common stock for $53 per share. During the…
A: rate of return = [selling price less purchase price +dividends ] / purchase price
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Q: ffective rate?
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A: Given details are : Risk free rate (Rf) = 6% Expected return on market (Rm) = 13% Beta of stock =…
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A: Required rate of return = risk free rate + beta * (market return - risk free rate)
Q: - Calculate the average rate of return for each stock during the period 2x15 through 2x19. Assume…
A: Realized return of a portfolio means that return which is going to be received from the portfolio.…
Q: Calculate internal rate of return.
A: Internal rate of return refers to measure of rate of return on investment.
Q: Sam Slater buys a $10,000, 13-week Treasury bill at 5 % .What is the effective rate? (Round your…
A: Discount = Value * Rate * time Discount = $10000 * 5.5% * 13 / 52 Discount = $137.50
Q: calculate the internal rate of return
A: Information Provided: Discount rate = 10% Realisable Value = 20%
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Q: Explain expected rate of return
A: Return: Return is defined as the money attained or lost on an investment through certain time…
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Q: Explain realized rate of return
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Q: Year Stock A Stock B 1 2.00% 0.20% 6.80% -3.00% 3 -20.00% -8.00% 4 17.00% 26.00% 9.00% 6.00% 2.
A: The variance and expected return can be computed as follows :
Q: Asset P has a beta of 0.9. The risk-free rate of return is 8 percent, while the return on the market…
A: Required rate of return = risk free rate + beta * (market return - risk free rate)
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A: Required rate of return = risk free rate + beta * (market return - risk free rate)
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A: Given details are : Current selling price of preferred stock = $42.16 Annual Dividend = $1.95 We…
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- The following are annual rates of return for T-bills in Ghana and Share on the Ghana Stock exchange Year T-bill Shares on Ghana Stock Exchange2016 0.063 0.1502017 0.081 0.0432018 0.076 0.3742019 0.090 0.1922020 0.085 0.106a. Compute the arithmetic mean rate of return and standard deviation of rates of return for the two series. b. Discuss these two alternative investments in terms of their arithmetic average rates of return, their absolute risk, and their relative risk. c. Compute the geometric mean rate of return for each of these investments. Compare the arithmetic mean return and geometric mean return for each investment and discuss the difference between mean returns as related to the standard deviation of each series.The risk-free rate is 4.15 percent. What is the expected risk premium on this stock given the following information? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Probability of Rate of Return if State State of the Economy State of Economy Вoom Occurs 0.35 16% Normal 14% 0.65What is the approximate and exact nominal rate of return on the common stock of Mountain Unequipped Inc. if its real rate of return is 9.25% and inflation rate is 5.6%?
- Give Step by Step Solution with explanationWhich one is correct answer please confirm? Q1: If the return on U.S. Treasury bills is 7.02%, the risk premium is 2.32%, and the inflation rate is 4.16%, then the real rate of return is ____. a. 2.86% b. 7.02% c. 4.70% d. 6.48%Solve step by step with an explanation
- BhupatbhaiAssume that the risk-free rate is 6.00% and the market risk premium is 6.75%. What is the expected return for the overall stock market (rM) ? (Answer as a percent with 2 decimal places. For example, 10 percent should be entered as 10.00. Do not use the % sign.)You live in a world where assets are priced by the CAPM. The following information is given to you regarding stock X. The expected payoff from the stock X=£105.00 Expected return of stock X = 18% Risk-free rate =5% Market Risk Premium = 9% Assume there are no other changes, except that the correlation between the returns of Stock X and the market becomes twice what it is currently. How would this change affect the current price of Stock X? Explain why the change of the correlation causes the observed change in the stock price. [hint: Provide a risk-based explanation]
- Suppose you start with buying a stock in £ (equivalent to $100) when the exchange rate is £1 = $1.5. One year later, the stock price changes to £75, and you sell it. At the time of the sale, the exchange rate is £1 = $1.6. What is your total percentage return? What percentage of your return is due to the exchange rate? Total return = 12.50%; Exchange rate return = 6.67%. Total return = 20%; Exchange rate return = 7.50%. Total return = 20%; Exchange rate return = 0.0%. Total return = 12.50%; Exchange rate return = 7.50%. Total return = 0.0%; Exchange rate return = 7.50%. Total return = 20%; Exchange rate return = 6.67%.The following table shows the nominal returns on Brazilian stocks and the rate of inflation. Year Nominal Return (%) 2015 2016 0.2 -13.0 2017 -11.0 2018 -42.1 2019 2020 66.9 27.6 Inflation (%) 6.5 6.6 7.1 11.4 7.0 3.6 a. What was the standard deviation of the market returns? Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. b. Calculate the average real return. Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. a. Standard deviation b. Average real return % %Use the following information on states of the economy and stock returns to calculate the standard deviation of returns. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Probability of State of Security Return if State Occurs State of Economy Economy 0.40 Recession Normal -5.50% 11.00 0.40 0.20 Вoom 17.00