An investment has beta-what is the required return

Assignment Help Business Economics
Reference no: EM13886870

An investment has a beta of 1.0. The risk free rate is 2% and current market return is 8%?

What is the required return?

So, if you were able to guarantee a return of 7% on this investment, should you go forward with the investment?

What is the required return if beta is .8 instead? So, if you were able to guarantee a return of 7% on this investment, should you go forward with the investment?

Reference no: EM13886870

Questions Cloud

Purely competitive firm finds that the market price : A purely competitive firm finds that the market price for its products is $30.00. It has a fixed cost of $100.00 and a variable cost of $17.50 per unit for the first 50 units and then $37.50 per unit for all successive units.
Source of income other than your wage earnings : Suppose there are two commodities, food, c, and work, L. Food is a "good" and work is a "bad".The prevailing prices of c and L are, Pc= $1/unit and w = -$10/hr. (the price of consuming another unit of L is -$10/hr) Suppose you can work no more than 2..
How each of the nine procedures could be used in the audit : Describe how each of the nine procedures could be used in the audit of inventory and identify the related assertion(s) the procedure is designed to test.
Define the state of the system as the number of points : In American football, touchdowns are worth 6 points.
An investment has beta-what is the required return : An investment has a beta of 1.0. The risk free rate is 2% and current market return is 8%? What is the required return?
What is the terminal voltage : A battery with emf 10.30z V and internal resistance 0.50 0 is inserted in the circuit at d, with its negative terminal connected to the negative terminal of the 8.00-V battery. What is the difference of potential Vbc between the terminals of the 4..
Assuming a vertical surface tension force : A steel needle of length L and radius r will ?oat in water if carefully placed. Write an equation that relates the various variables for a ?oating needle assuming a vertical surface tension force.
Explain the impact of the airline deregulation act : Explain the impact of the Airline Deregulation Act
Discuss a real world mncs international strategy : Discuss a "real world" MNC's international strategy. The discussion should identify the company's strategic plans, how the factors of international strategy, above, affected them, location efficiencies, a SWOT analysis, their application of the st..

Reviews

Write a Review

 

Business Economics Questions & Answers

  How much does the airport need to set aside now to pay

How much does the airport need to set aside now to pay for these costs, if the company can earn 10% per year, compounded every 4 months?

  Estimate the second partner''s advice not to move downtown

We have spent so much on our present office that we cannot afford to waste this money by moving now." Estimate the second partner's advice not to move downtown.

  How changes in supply was perfectly inelastic

how will my answers change if supply was perfectly inelastic. If supply was perfectly elastic. If demand was perfectly inelastic. If demand was perfectly elastic.

  The interest-only mortgage typically converts later

The "interest-only" mortgage typically converts later to a:

  What is probability that product will operate properly

Probabilities of A and B performing successfully for 1,500 times are .96 and .92, respectively, and are independent. What is probability that product will operate properly 1,500 or more times.

  Calculate the four-firm concentration ratio

An industry consists of three firms with sales of $175,000, $555,000, and $205,000. Calculate the Herfindahl-Hirschman index (HHI). Instruction: Round to the nearest integer. Calculate the four-firm concentration ratio (C4).

  How much do you have to pay

You borrowed $20,000 at a rate of 12% compounded monthly. It will be paid back in 60 equal payments over the next 5 years. Immediately after your 30th payment, you decide to pay off the balance. How much do you have to pay?

  How much interest is paid over the life of the loan

What will be the monthly payment on a 30-year, $250,000 mortgage loan, where the interest rate is 6% per year, compounded monthly? How much interest is paid over the life of the loan? What will be the monthly payment on a 30-year, $250,000 mortgage l..

  The labor demand curve-opportunity cost of leisure

The opportunity cost of leisure: The elasticity of labor demand is higher when: The labor demand curve:

  Does player have a dominant policy

Does player 1 have a dominant policy also if so Illustrate what is it or does player 2 have a dominant policy also if so Illustrate what is it.

  Maintain automated supply system for accounting of organizat

Requisition items through Military Standard Requisitioning & Issue Procedures (MILSTRIP)

  Why does central planning not work efficiently

Explain how a price increase could be better for society than not raising the price of a product or service. Why does central planning not work efficiently?

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