F1 please help.... What is the risk premium for Dolphin Doors stock if its expected real return is 7.45%, the expected inflation rate is 3.98%, and the risk-free return is 4.18%?O 5.47% (plus or minus 0.02 percentage points)8.59% (plus or minus 0.02 percentage points)O 7.55% (plus or minus 0.02 percentage points)6.51% (plus or minus 0.02 percentage points)O None of the other alternatives are within 0.02 percentage points of the correct answer

(1+Nominal Rate) = (1+Real rate)*(1+Inflation Rate)(1+Nominal Rate) = (1+7.45%)*(1+3.98%)(1+Nominal…

Answered: What is the risk premium for Dolphin…

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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Assume that the risk-free and rate is 5.50% and the market risk premium is 7.75%. What is the expected return for the overall stock market (rm)?
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The risk-free rate of return is 3.7 percent and the market risk premium is 6.2 percent. What is the expected rate of return on a stock with a beta of 1.21 O a. 10.92 percent O b. 11.40 percent O c. 11.20 percent O d. 12.47 percent
A stock's beta equals 1.34. If the risk-free rate is 1.3% and the market risk premium is 5.9%, what return should be required on this stock if the CAPM model holds? O 8.41% O 9.21% O 7.48% O 10.04% Onone of these
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A2) The risk-free rate of return is 2.8 percent, the inflation rate is 3.1 percent, and the market risk premium is 5.9 percent. What is the expected rate of return on a stock with a beta of 0.58?
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Consider a three-factor APT model. The factors and associated risk premiums are: Factor Risk Premium (%) Change in gross national product (GNP) + 6.5 Change in energy prices 0.5 Change in long-term interest rates +2.9 Calculate expected rates of return on the following stocks. The risk - free interest rate is 6.8%. A stock whose return is uncorrelated with all three factors

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