Expected return on the market portfolio-risk-free rate

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Reference no: EM131049782

1. What is the value of a 20-year, noncallable bond with an annual coupon rate of 9.5%, but making semiannual interest payments? The bond has a face value of $1,000, and you require an annual 8.4% discount rate for this investment.

$1,105.69

$1,133.34

$1,161.67

$1,190.71

$1,220.48

2. Calculate the required rate of return for Nashua Inc., assuming that (1) the risk-free rate is 7% , (2) the expected return on the market portfolio is 12%, (3) the firm has a beta of 1.20, and (4) its realized rate of return has averaged 15.0% over the last 5 years.

10.29%

10.83%

11.40%

12.00%

13.00%

Reference no: EM131049782

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