Find the expected rate of return and the market risk

Assignment Help Finance Basics
Reference no: EM13265237

Stock A has a beta of .2, and investors expect it to return 5%. Stock B has a beta of 1.8, and investors expect it to return 17%. Use the CAPM to find the expected rate of return and the market risk premium on the market.

Reference no: EM13265237

Questions Cloud

Identify potential business environments : Compare and contrast benefits and challenges that exist between centralized database management systems and distributed database management systems. Identify potential business environments where each can be properly used.
Design a non-inverting amplifier circuit to do the task : A transducer with a Thevenin equivalent output resistance, RTH =10 k-ohm and a Thevenin equivalent open circuit voltage of V TH = 1 millivolt must be amplif ied to 5 volts. Using an ideal OpAmp, design a non-inverting amplifier circuit to do this ..
Explain what is the half-life for this reaction : Molecular iodine, I2(g), dissociates into iodine atoms at 625 K with a first-order rate constant of 0.271 s-1. What is the half-life for this reaction
What is the distance between the cliffs : A cowboy stands on horizontal ground between two parallel vertical cliffs. He is not midway between the cliffs. What is the distance between the cliffs
Find the expected rate of return and the market risk : Stock A has a beta of .2, and investors expect it to return 5%. Stock B has a beta of 1.8, and investors expect it to return 17%. Use the CAPM to find the expected rate of return and the market risk premium on the market.
Explain what must the activation energy be for the rate : The rate constants of some reactions double with every 10 degree rise in temperature. Assume that a reaction takes place at 350 K and 360 K. What must the activation energy be for the rate constant to double as described
Explain the subsequent motion of the rod : A uniform rod of mass M and length L is sitting on a frictionless table. Describe the subsequent motion of the rod
Explain he atoms have the same crms value as n2 molecules : At what temperature will He atoms have the same Crms value as N2 molecules at 25 degrees Celsius. Solve this problem without calculating the value of Crms for N2. Crms is the root mean square speed.
Determine the initial x and final value x : Determine the initial x(0+) and final value x(infinity), given the following Laplace transforms X(s): X(s) = 2s2 + 5/s3 + 3s + 1

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculating the net investment

Determine net investment for an extruder that costs $42,000, if shipping expenses are $1,500 and installation is $4,800? Suppose this efficient equipment is replacing an older extruder with a book and market value of zero

  What is the investor overall return for the four years

Good years are followed by equally bad years for a mutual fund. It earns +8%, -8%, +12%, -12% in successive years. What is the investor's overall return for the four years?

  Average inventory turnover

X corporation has total annual sales of $400,000 and a gross profit margin of 20 percent. Its current assets are $80,000; inventories $30,000; cash $10,000. current liabilities $60,000.

  Formula for pv of future balloon payment

When Federal Reserve notifies banks that they should hold fifteen cents for every dollar that is deposited, it is controlling the money supply by using which of following tools?

  Find approximate total amount of money

XYZ Motors just issued 225,000 zero coupon bonds. These bonds mature in twenty years, have a par value of $1,000, & have a yield to maturity of 7.45%.

  Bond price-current yield-ytm-discount

Suppose that the Financial Management Corporation's $1,000-par-value bond had a 5.700% coupon, matured on May 15, 2017, had a current price quote of 97.708, and had a yield to maturity (YTM) of 6.034%.

  What are the savings from the lockbox

Rosenthal Design has daily sales of $37,909. The financial management team determined that a lockbox would reduce the collection time by 1.3 days. Assuming the company can earn 7.1 percent interest per year, what are the savings from the lockbox?

  Exceptional line of magnetized wheels

JumboMags creates an exceptional line of magnetized wheels that custom car builders use in kits. An rise in selling price through adding granite mix paint flecks which will also increase variable expenses from and with an increase in units to 12,500 ..

  Determination of expected rate of return

Williams and Westrich stock is currently selling for $15.25 each share, and the dividend is expected to continue at 92¢ per share. Management expects the stock to grow at 8 percent.

  Find the today stock price

Suppose that you plan to by shares XYZ stocks today and hold it for two years. Your expectations are that you will not receive a dividend at the end of year one.

  Compute amount of new investment

Associated Breweries is considering to market unleaded beer. The finance the venture, it proposes to make a right issue with a subscription price of 10 One new share can be buy for each two shares held.

  Computation of internal rate of return and npv

Computation of internal rate of return and NPV and compute the net present value for each project if the firm has a 10% cost of capital

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