XYZ  has a beta of 1.5. The annualized market return yesterday was 14%, and the risk-free rate is currently 1%. You observe that XYZ had an annualized return yesterday of 20%. Assuming that markets are efficient, this suggests that          A)   bad news about Matthews was announced yesterday.           B)   good news about Matthews was announced yesterday.          C)   no news about Matthews was announced yesterday.          D)   interest rates rose yesterday.          E)   interest rates fell yesterday.   Please justify your answer.

Q: You hear on the news that the S&P 500 was down 2.1% today relative to the risk-free rate (the…

A: Excess return to Zynga=Zynga Beta*Market excess return.=1.3*(−2.1%)=−2.7%

Q: During the coming year, the market risk premium (rm− rf), is expected to remain the same, while the…

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Q: At the beginning of 2007​ (the year the iPhone was​ introduced), Apple's beta was 1.3 and the​…

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Q: Giambona Corporation's stock had a required return of 8.50% last year when the risk - free rate was…

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Q: Market Condition Probability of Occurrence 0.20 Strong Normal Weak Calculate expected returns for…

A:

Q: At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.1 and the…

A: Risk free rate =Rf = 4.5% Market risk premium = (Rm-Rf) = 6.8% Beta = 1.1 As per Capital market…

Q: Suppose that the borrowing rate that your client faces is 5%. Assume that the equity market index…

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Q: Historical nominal returns for Coca-Cola have been 8% and -20%. The nominal returns for the market…

A:

Q: a. Given the following holding-period returns, compute the average returns and the standard…

A: Here, MonthS CorpMarket12%1%2-1%2%3-1%2%41%1%56%5%66%1%

Q: At the beginning of 2007​ (the year the iPhone was​ introduced), Apple's beta was 1.3 and the​…

A: Beta: 1.3Risk free rate: 4.5%Beginning price: $82.72Closing price: $193.19Market risk premium: 6.3%

Q: Suppose Pepsi Co. has a beta of 0.7, whereas the beta of Microsoft is 1.1. The risk free interest…

A: In this question we need to find expected return of Pepsi Co. and Microsoft According to CAPM.…

Q: Bllowing icon Termi 1 year Rate (EAR, 1.99 %) in order to copy its contents into a spreadsheet.) 2…

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Q: Tate (the markets excess Tel are thinking about your portfolio and your investments in Hewlett…

A: As per the Capital Asset Pricing Model expected return can be calculated using the formula given…

Q: You estimate that the expected return of SPY stock is 15%, and standard deviation of the stock is…

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Q: 2

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Q: Porter Plumbing's stock had a required return of 11.00% last year when the risk-free rate was 5.50%…

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Q: At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.3 and the…

A:

Q: Complete the table with the alphas below: (Round to one decimal place.) Expected Return Volatility…

A: According to CAPM approach, k = Rf + beta (Rm - Rf) Where , k = rate of return Rm =  market return…

Q: uppose that the probability that the economy will be in a recession one year from now is 0.25. If…

A: In this question, the probability that the economy will be in a recession one year from now is 0.25…

Q: At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.2 and the…

A: Risk free rate = 3.8% Beta = 1.2  Market risk premium = 6.7%    As per CAPM, the expected return is…

Q: (Related to Checkpoint 7.1) (Expected rate of return and risk) B. J. Gautney Enterprises is…

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Q: You hear on the news that the S&P 500 was down 1.7% today relative to the risk-free rate (the…

A: Excess return of the market is -1.7% Excess return on stock is calculated as Excess return = Beta of…

Q: You hear on the news that the S&P 500 was down 2.1% today relative to the risk-free rate (the…

A: Market risk premium: -2.1%Beta od Hewlett: 1.1Beta of Proctor and Gamble: 0.4

Q: g. BABA is a volatile stock and its stock price is expected to fluctuate within ±+50% from its…

A: Given that BABA's stock price can fluctuate within ±50% from its current price level of $20, the…

Q: d4) Assume that the MLIK100 Index at close of trading yesterday was 4,000 and the daily volatility…

A: Daily volatility0.008Yesterday Price4000Beta0.92Alpha0.08Omega0.000005Daily volatility=0.008

Q: Porter Plumbing's stock had a required return of 10.25% last year, when the risk-free rate was 5.50%…

A: Old Required rate of return = 10.25% Risk free rate = rf = 5.50% old Market risk premium = old mrp =…

Q: K At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.51 and the…

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A: As per index model regression ,Relationship between expected return and beta is as follows:-Rs =…

Q: Isaac only has $1,090 today but needs $1,979 to buy a new computer. How long will he have to wait to…

A: To open the "NPER function" window - MS-Excel --> Formulas --> Financials --> NPER.

Q: The following is part of the computer output from a regression of monthly returns on Waterworks…

A: Risk management is a critical aspect of managing investment portfolios, aimed at minimizing the…

Q: At the beginning of 2007​ (the year the iPhone was​ introduced), Apple's beta was 1.46, and the​…

A: 1. On the first question, we compared Apple's actual return in 2007 to the required rate of return…

Q: a. Compute the expected rate of return for Intel common​ stock, which has a 1.1 beta. The​ risk-free…

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Q: (Related to Checkpoint 7.1) (Expected rate of return and risk) B. J. Gautney Enterprises is…

A: Expected return will be calculated by multiplying the probability with rate of return..Expected…

Q: Tiger Corp's stock had a required return of 11.75% last year, when the risk-free rate was 4.50% and…

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Q: At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.3 and the…

A: As per CAPME(ri) = Rf  + Bi * (E(Rm) - Rf)whereE(ri) = Expected returnRf = Risk free rateBi =…

Q: sume that the CAPM is a good description of stock price returns. The market expected return is 8%…

A: Expected market return = 8%Risk free rate = 3.5%Beta Green Leaf = 1.50Beta NatSam = 1.80Beta HanBel…

Q: At the beginning of 2007 (the year the iPhone was introduce was $81.47. Apple's price at the end of…

A: The CAPM capital assets price model gives the risk based the required rate of return and tells us…