Tammy, Corporate Finance

rf is 5%
rM is 10%
according to the SML and the CAPM, an asset with a beta of -2 has a required return of negative 5% (=5-2(10-5).
can this be possible?
Is this a negative asset with risk
Why would someone invest in this negative investment?
Posted Date: 2/15/2013 3:15:48 AM | Location : United States







Related Discussions:- Tammy, Assignment Help, Ask Question on Tammy, Get Answer, Expert's Help, Tammy Discussions

Write discussion on Tammy
Your posts are moderated
Related Questions
How would you evaluate a proposed merger?

Question: (a) You are given the following information on two risky assets A and B. E(X) = 25% E(Y) = 30% Var (X) = 16% Var (Y) = 49% The correlation matr

Question: (a) Define foreign exchange rate risk and the three different type of exchange rate risks. Illustrate the three types of risks with examples. (b) Identify and ou

To determine Henkel''s corporate beta, unlever (and relever) the ordinary least squares (OLS) market betas for each company in the European Household and Personal Care segment. Pri

Chang and Fyffe (1971) assume that a ?rm has a ''long-run sales history of individual seasonal-style-goods SKUs or groups of such SKUs''. They propose to estimate demand by using r

Question: In view of its international operations management, Remo Ltd which is based in USA expects to make a payment of £ 50,000 to a UK supplier for raw materials in six mon


Here is the pro-forma income statement for Semen Indonesia, an overseas venture that Cemex is planning to invest in.  In this exercise, you will need to evaluate the inve

You are a ceo of a sotware firm that has limited access to debt equity markets. The average return on last year projects is 28 % . and cost of capital is 12%. would npv pr Irr be

Summarize the key statistics for the stock and the industry (choose 8 items you believe informative, such as P/E ratio, market capitalization, dividend yield, ROE, sales etc.tion..