The sensitivity of a mining company’s stock to unexpected changes in interest rates and GNP is measured by betas of 0.85 and 0.20. What is the expected rate of return on the company’s stock if market-wide expected rates of return for portfolios with no systematic risk and with sensitivity only to interest rates and GNP are 6.0%, 8.0%, and 11.0% respectively.
The sensitivity of a mining company’s stock to unexpected changes in interest rates and GNP is measured by betas of 0.85 and 0.20. What is the expected rate of return on the company’s stock if market-wide expected rates of return for portfolios with no systematic risk and with sensitivity only to interest rates and GNP are 6.0%, 8.0%, and 11.0% respectively.
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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The sensitivity of a mining company’s stock to unexpected changes in interest rates and GNP is measured by betas of 0.85 and 0.20. What is the expected rate of return on the company’s stock if market-wide expected
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