Calculate the expected returns on the stock market

Assignment Help Finance Basics
Reference no: EM131132530

The riskless return is currently 6%, and Chicago Gear has estimated the contingent returns given here.

a. Calculate the expected returns on the stock market and on Chicago Gear stock.

b. What is Chicago Gear's beta?

c. What is Chicago Gear's required return according to the CAPM?

REALIZED RETURN

1114_u.jpg

a. Calculate the expected returns on the stock market and on Chicago Gear stock. 

b. What is Chicago Gear's beta?

c. What is Chicago Gear's required return according to theCAPM?

Reference no: EM131132530

Questions Cloud

Create a program that displays hello world : Create a console based, non-GUI Java program using NetBeans Integrated Development Environment (IDE) that displays "Hello world!
Create a class called author : Create a class called Author is designed as follows: Three private instance variables: name (String), email (String), and gender (char of either ‘m' or ‘f'); One constructor to initialize the name, email and gender with the given values
Definitions of the total sum and squares : Using the definitions of the Total Sum and Squares (TSS) and the Sum of Squared Residuals (SSR) compute R2 of this regression
Calculate the volatility standard deviation of a portfolio : Calculate the volatility (standard deviation) of a portfolio that is 55% invested in Coca-Cola and 45% invested in Exxon Mobil stock. For this problem, please use two different Variance formulas and compare how results differ.
Calculate the expected returns on the stock market : Calculate the expected returns on the stock market and on Chicago Gear stock. What is Chicago Gear's beta? What is Chicago Gear's required return according to the CAPM?
Calculate the average rate of return for each stock during : Calculate the average rate of return for each stock during the period 2000 - 2009. Assume you held a portfolio of 70% Stock A and 30% Stock B during the period. Calculate the assumed rate of return each year for your portfolio. Then calculate the ave..
What is the volatility of a portfolio consists of an equal : What is the volatility (standard deviation) of a portfolio that consists of an equal investment in 25 type S firms? What is the volatility (standarddeviation) of a portfolio that consists of an equal investment in 25 type I firms?
Calculate the expected return of investing in : Suppose the market risk premium is 4.0 % and the risk-free interest rate is 3.0%. Use the data below to calculate the expected return of investingin.
How many canadian dollars will it take to buy a set of dish : Suppose the U.S. dollar price of the Canadian dollar is $.75. How many Canadian dollars will it take to buy a set of dishes selling for $60 in Detroit, Michigan?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the clean price of the bond

You purchase a bond with an invoice price of $1,105. The bond has a coupon rate of 10.1 percent, semiannual coupons, and there are four months to the next semiannual coupon date What is the clean price of the bond?

  Abc company stock has a required return of 12 and the

abc company stock has a required return of 12 and the stock sells for 40 per share. the firm just paid a dividend of

  At what price would you expect the firm to sell

A firm projects an ROE of 20% and it will maintain a plowback ratio of .30. The next year's earning are expected to be $2.0/per share. Assume investors expect 12% rate of return on the stock. Consider the dividends are  expected to grow at a constant..

  Discuss the risks associated with arbitrage transactions

QI. "A swap bank has to entail certain risks which are inherent to the swap business and are interrelated" Explain the risks involves in swap business.

  Describe the forces of globalization and its implications

Describe the forces of globalization and its implications for the multinational firm.

  Find the current bond price

IRT Corporation has 7% coupon bonds on the market that have 8 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 9%, find the current bond price?

  Define demand deposits compensating balance

Define the following terms: a. Demand deposits b. Compensating balance c. Disbursement float d. Deposit float  e. Lockbox  f. Wire transfer  g. Depository transfer check h. Zero-balance system  i. Draft j. Automated clearinghouse

  Calculate percentage of the founder family votes

Rust Pipe Corporation was established in 1985. Four years later the company went public. At that time, Robert Rust, the real owner, decided to establish 2-classes of stock. The 1st represents Class A founders' stock and is entitled to ten-votes each ..

  What is acquisition and activation strategies in sales roadm

What is acquisition and activation strategies in sales roadmap?

  By how much should the stock go down on the ex-dividend date

Based solely on the impact of the cash dividend, by how much should the stock go down on the ex-dividend date? What will the new price of the stock be?

  Determinants of interest rates

Second Mid-term exam Determinants of interest rates Opportunity cost The relationship between bond ratings and interest rates

  Statistical analysis technique

A client gives you a data set of 30 observed values that represent the number of gallons of gas that 30 individual Nissan Sentra owners purchased at the gas pump last month. Your client wants to know if the data set represents a normal distributio..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd