CORPORATE FINANCE- ACCESS >C<
CORPORATE FINANCE- ACCESS >C<
12th Edition
ISBN: 9781307447248
Author: Ross
Publisher: MCG/CREATE
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Chapter 12, Problem 1QAP
Summary Introduction

Adequate information:

Expected GNP growth = 3.5%

Expected interest rate = 2.9%

Beta on change in GNP (ßGNP) = 1.3

Beta on change in interest rate (ßr) = -0.47

Expected rate of return (ER) = 10.2%

Actual GNP growth = 3.2%

Actual interest rate = 2.7%

To compute: The revised expected return.

Introduction: Expected return simply refers to the return that is anticipated on the investment.

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