Required rate of return on security

Assignment Help Finance Basics
Reference no: EM131114362

Assume that the risk free rate of return is 8%, the market expected rate of return is 12%. The standard deviation of the market return is 2% while the co-variance of return for security A and the market is 2%.

REQUIRED:

What is the required rate of return on Security A?

Reference no: EM131114362

Questions Cloud

Find the voltage across the 50-? resistor : Then find the voltage across the 50-Ω resistor and the total power supplied by the source
Determining the strategic planning process : How can accounting, traditionally concerned with historical performance, beincorporated into acompany's strategic planning process? What role do customers and competitors play in the process?
Degree of leverage of this company : A firm has a sales level target of $200,000. If the variable cost is $120,000 and the fixed cost is $40,000. Find the degree of leverage of this company
What three basic documents are necessary to conduct : What three basic documents are necessary to conduct a typical foreign commerce trade? Briefly discuss the purpose of each.
Required rate of return on security : What is the required rate of return on Security A?
Develop and execute a ps pice program to analyze the circuit : Develop and execute a PS pice program to analyze the circuit shown in Figure P2.5.1 to evaluate the node voltages and the current through each element.
How society manages its scarce resources and benefits : How society manages its scarce resources and benefits from economic interdependence? Why the demand curve slopes downward and the supply curve slopes upward? Where is the point of equilibrium and what does it determine?
Expected return of a portfolio of the two assets : Compute the expected return of a portfolio of the two assets.
Abandon the project assuming a discount rate : Determine when to abandon the project assuming a discount rate of 10%.

Reviews

Write a Review

Finance Basics Questions & Answers

  Position yourself as the new cfo of a publically traded

bull position yourself as the new cfo of a publically traded company. you must provide the ceo an assessment of the

  What is an efficient portfolio

What is an efficient portfolio? How can the return and standard deviation of a portfolio be determined?

  Evaluate the riskier project

BPC has decided to evaluate the riskier project at a 12 percent rate and the less risky project at a 10 percent rate.

  What will the new price of the stock be

The Ohio Freight co. common stock is selling for $80 the day before the stock goes ex-dividend. The annual dividend yield is 5.4%, and the dividends are distributed quarterly.

  Present value table-present value function

by using a present value table, your calculator, or a computer program present value function, answer the following questions: Find out the present value of nine annual cash payments of $8,000, to be paid at the end of each year using interest rate ..

  What is the price of the bond

What is the price of the bond if it matures in 15, 20, 25, or 30 years?

  What forces exist to encourage unethical accounting practice

What forces exist that encourage unethical accounting practices. What justification do you think accountants use for their unethical behavior. Why do you think efforts to change this have not been enacted

  Develop a table in excel that can be used to track the value

You will be developing a simple portfolio that will be used for analysis over the following five weeks. You are given $10,000 to allocate to a portfolio. You must allocate 100% of your portfolio to the following securities: One hundred shares of a pu..

  What is the wacc before the change in capital structure

Find the intrinsic value of the firm after the change and what could be the intrinsic stock price, which can translate to the market stock price.

  A share of stock is now selling for 130 it will pay a

a share of stock is now selling for 130. it will pay a dividend of 6 per share at the end of the year. its beta is 1.

  What is the company cost of equity

Reliable Electric is a regulated public utility, and it is expected to provide steady growth of dividends of 6% per year for the indefinite future. Its last dividend was $5 per share; the stock sold for $40 per share just after the dividend was pa..

  Compare and contrast the size of the potential payof

a. Compare and contrast the size of the potential payoff and the risk involved in each of these alternatives.

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