The expected return on the market portfolio

Assignment Help Financial Management
Reference no: EM13727296

The expected return on the market portfolio is 15%. The standard deviation of return on the market portfolio is 12%. Beta of stock A is 1.2 and the standard deviation of return on stock A is 18%. What could be the expected return of stock A?

a) 15% (b) 11% (c) 19% (d) Not enough information is provided

Reference no: EM13727296

Questions Cloud

Examples of the eight stages of the buying process : Examples of the eight stages of the buying process in action and which stage is the most important in the buying process
Commodity price changes and labor costs : An example of diversifiable risk that a financial manager should ignore when analyzing a project's risk would include: Commodity price changes, Labor costs, Overall stock price fluctuations
Depreciated straight-line to zero over seven-year tax life : Consider an asset that costs $675,500 and is depreciated straight-line to zero over its seven-year tax life. The asset is to be used in a four-year project; at the end of the project, the asset can be sold for $136,900.
Explain importance of convents in relation to artistic women : Explain the importance of convents in relation to artistic women during the Middle Ages. What does this have to do with the Querelles Des Femmes
The expected return on the market portfolio : The expected return on the market portfolio is 15%. The standard deviation of return on the market portfolio is 12%. Beta of stock A is 1.2 and the standard deviation of return on stock A is 18%. What could be the expected return of stock A?
Training design and development process : In a separate Word document, make your recommendations for changes to the training design and development process.
What would be the value of the bond : On Jan. 1, 2000, you purchased a bond that will pay $1,000 on Dec. 31 of each year from 2000 until 2019. It is now Jan. 1, 2015, and you decide that you would like to sell the bond. Assuming that the prevailing annual interest rate on that day for fi..
None of the medical costs are reimbursed by insurance : Mitzi's AGI for the year is $33,000. None of the medical costs are reimbursed by insurance. After considering the AGI floor, Mitzi's medical expenses total: Sidney purchased land in 2003 for $35,000 that she held as capital asses. This year, she cont..
What sort of food did people eat in the process of building : What sort of food did people eat in the process of building the great wall of china.

Reviews

Write a Review

Financial Management Questions & Answers

  Pros and cons of the two alternatives

An investment bank has been asked to underwrite an issue of 10 million shares by a company. It is trying to decide between a firm commitment where it buys the shares for $10 per share and best efforts where it charges a fee of 20 cents for each share..

  Discuss the effect of this on a defined benefit pension plan

During a certain year, interest rates fall by 200 basis points (2%) and equity prices are flat. Discuss the effect of this on a defined benefit pension plan that is 60% invested in equities and 40% invested in bonds.

  What is the projects payback period

A project has an initial cost of $52,125, expected net cash inflows of $12,000 per year for 8 years, and a cost of capital of 12%. What is the project's IRR? A project has an initial cost of $59,675, expected net cash inflows of $12,000 per year for ..

  A municipal bond carries a coupon rate of 7 and is trading

a municipal bond carries a coupon of 7 nbspand is trading at par what would be the equivelant taxable yield off this

  How much interest

Suppose you borrowed $14,000 at a rate of 10.0% and must repay it in five equal instalments at the end of each of the next five years. How much interest would you have to pay in the first year?

  Retained earnings decreased by what amount

Masterson Company has 420,000 shares of $10 par value common stock outstanding. During the year Masterson declared a 15% stock dividend when the market price of the stock was $36 per share. Three months later Masterson declared a $.60 per share cash ..

  Project is expected to produce cash flows

A project is expected to produce cash flows of $5,000, $8,000, and $16,000 over the next three years, respectively. After three years, the project will be discontinued. What is this project worth today at a discount rate of 15 percent?

  Evaluate the principal methods for assessing risk

Discuss the approach your organisation used to manage its new initiatives-especially new product developments and Discuss how your organisation evaluates projects within its overall portfolio.

  What is the bonds conversion ratio and straight-debt value

Preissle Company, wants to sell some 20-year, annual interest, $1,000 par value bonds. Its stock sells for $42 per share, and each bond would have 25 warrants attached to it, each exercisable into one share of stock at an exercise price of $47. The f..

  General business issues

Advice for Dealing with Business Problems

  Dhl and fedex have helped companies throughout the world

dhl and fedex have helped companies throughout the world succeed in the global economy by understanding the customers

  Interest compounded annually

What would be your annual return (interest compounded annually) if you paid $10,000 for a stock that paid a $400 annual dividend, and sold the stock 12 years later for $22,000?

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