+1-415-670-9189
info@expertsmind.com
Currently the risk free rate and market premium
Course:- Financial Management
Reference No.:- EM13942931




Assignment Help
Assignment Help >> Financial Management

Currently the risk free rate is 1% and the market premium is 3%. Given this information, which of the following statements is correct?

A) An index fund with beta = 1.0 should have a required return of 4%

B) An index fund with beta = 1.0 should have a required return less than 4%

C) An index fund with beta = 1.0 should have a required return greater than 4%

D) If stock doubles, it's required return must also double




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
The past five monthly returns for Kohls are 3.60 percent, 3.77 percent, −1.74 percent, 9.28 percent, and −2.62 percent. What is the average monthly return? (Round your answer
Simple Foods has a zero coupon bond issue outstanding that matures in nine years. The bonds are selling at 42 percent of par value. What is the company's after tax cost of deb
Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin pa
To gain an understanding of the affect of start date, rate of return, inflation and taxes on what it will take you to save a set amount of money by the time you retire at age
Although reduction of individual taxes is often encouraged, there is great controversy over reduction of corporate income taxes. Every April, you can find news stories about c
The inflation rates in the British pound and the Australian dollar are 2% and 8% respectively. What should the expected spot rate /Forward ER be, if the Spot ER is BP/ A$ .1?
Calculate the next three annual dividends for the common stock of Alpha Beta Corporation. The last annual dividend was Do = $1.24, but is projected to continue growing every y
Suppose that the CAPM holds. The expected return and standard deviation of a risky security A are 10% and 15%, respectively. The risk-free rate is 6%, and the expected return