Expected return on two stocks for particular market returns

Assignment Help Financial Management

Reference no: EM131347715

Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return Aggressive Stock Defensive Stock 6% 2.8% 4.6% 15 28 10 a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Beta A 2.8 Beta D 0.6 b. What is the expected rate of return on each stock if the market return is equally likely to be 6% or 15%? (Round your answers to 2 decimal places.) Rate of return on A 15.4 % Rate of return on D 7.3 % d. If the T-bill rate is 7%, and the market return is equally likely to be 6% or 15%, what are the alphas of the two stocks? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Alpha A % Alpha D %

Reference no: EM131347715

Questions Cloud

Describe the cause and symptoms of the disease : Describe the cause and symptoms of the disease. Which populations are most susceptible to infection? How is the disease transmitted? Is there a vaccine or treatment available for the disease?

What is whistle blowing : ACCT 19083 Corporate governance and ethics Assessment Task. What is whistle blowing? List and explain the likely causes or factors that lead an employee that works in commercial organizations to whistle blow? Use two examples from your research to..

Provide a brief background on your chosen disease : Provide a brief background on your chosen disease. Identify how this disease develops or how individuals contract the disease. Identify ways of preventing this disease. How could a fitness or exercise program, if any, help prevent this disease?

Does organization encourage positive organizational behavior : Does this organization encourage positive Organizational Behavior? If yes, how do they demonstrate this? If not, what type of Organizational Behavior do they seem to encourage?

Expected return on two stocks for particular market returns : Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns: Market Return Aggressive Stock Defensive Stock 6% 2.8% 4.6% 15 28 10. What are the betas of the two stocks?

Find the net present value of project : Assuming a nominal rate of interest, convertible quarterly, of 12%, find the net present value of a project that requires an investment of $100,000 now, and returns $16,000 at the end of each of years 4 through 10.

About the company through its segmented data : Find the financial statements for a publicly traded company that provides segmented financial information. Prepare an overview (approximately 300 words) of what is revealed about the company through its segmented data. Post a link to the financial st..

What is bonds coupon rate : ABC Inc. just issued a twenty-year semi-annual coupon bond at a price of $1,000. The face value of the bond is $1,000, and the market interest rate is 9%. What is the bond's coupon rate?

Find the current yield on this bond : A 20-year bond with X% annual coupons has a face value of $1,000. The price of the bond is $1, 050. The interest rate is 8% convertible semiannually. Assume redemption value equals par value. Find the current yield on this bond.

User Account

All Pages