What is market risk premium

Assignment Help Financial Management
Reference no: EM131347109

Asset W has an expected return of 9 percent and a beta of 2.05. If the risk-free rate is 3.6 percent, what is the market risk premium? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Market risk premium

Reference no: EM131347109

Questions Cloud

Determine the optimal crew size : Assuming that the owner of the trawler is interested in maximizing profits, determine the optimal crew size.
What is the annual financing cost of bonds : New Hampshire Corp. has decided to issue three-year bonds denominated in 5,000,000 Russian rubles at par. The bonds have a coupon rate of 17%. If the ruble is expected to appreciate from its current level of $.03 to $.032, $.034, and $.035 in years 1..
List five measure that can be taken as part of risk analysis : Select a critical infrastructure or facility, such as a power plant or dam, and list three to five measures that can be taken as part of a risk analysis to better secure this site.
Give the answer of muliple choice question : Continued therapy of pernicious anemia (PA) generally lasts how long?What pulmonary defense mechanism propels a mucous blanket that entraps particles moving toward the oropharynx?The common hay fever allergy is expressed through a reaction that is me..
What is market risk premium : Asset W has an expected return of 9 percent and a beta of 2.05. If the risk-free rate is 3.6 percent, what is the market risk premium?
Determine the maximum efficiency and open circuit voltage : Determine the maximum efficiency and open circuit voltage for the propane?oxygen fuel cell, C3H8 + 5(O2) → 3(CO2) + 4[H2o(l)].
Determine the boundaries of the three stages of production : In the Deep Creek Mining Company example described in this chapter (Table 7.1), suppose again that labor is the variable input and capital is the fixed input. Specifically, assume that the firm owns a piece of equipment having a 500-bhp rating.
What types of tools are used and what techniques are used : What types of tools are used? What techniques are used? Prepare a 10-15 Slide presentation that fully discusses the topic questions.
Expected return on the market-what must risk-free rate be : A stock has an expected return of 13.9 percent, a beta of 1.80, and the expected return on the market is 10.3 percent. What must the risk-free rate be?

Reviews

Write a Review

Financial Management Questions & Answers

  How do the adjustments affect the sizes of booms

How are banks likely to adjust their equity ratios when the riskiness of assets changes? Explain.-  How do the adjustments affect the sizes of booms and recessions? Explain.

  Doubled or tripled in price at some financial institutions

In general, which fees have doubled or tripled in price at some financial institutions for checking accounts?

  What is the standard deviation of the analysts profit

Assume a market index represents the common factor and all stocks in the economy have a beta of 1. Firm-specific returns all have a standard deviation of 39%. What is the expected return (in dollars), and what is the standard deviation of the analyst..

  New machine which will reduce manufacturing costs

Mars, Inc. is considering the purchase of a new machine which will reduce manufacturing costs by $5,000 annually. The company will depreciate the cost of the new machine using the straight line method over the project life and it expects to sell the ..

  Define the central dilemma presented in the case

Employees at D-Bart’s San Jose facility have reason to be concerned. Division Manager Karen Howell received word from headquarters that the San Jose plant would be closed, with operations merged into the San Francisco facility. Identify and define th..

  Draw a carefully labelled cash flow diagram

Draw a carefully labelled cash flow diagram to represent the above financial transactions.-  What is the instalment amount?

  Market-derived real estate capitalization rates

What effect, if any, might an increase in the rate of return prospects in the stock or bond markets have on market-derived real estate capitalization rates? Can you think of circumstances that might cause a property’s market value to decline faster t..

  What discount off the purchase price results

A car dealership can offer a $36,000 car under a special promotion with four years financing at 0%, or can offer a discount off the price of the vehicle if the buyer finances the sale at .5% monthly over the four years. What discount off the purchase..

  Two most popular capital budgeting methods

Graham and Harvey (2001) found that ___ and ___ were the two most popular capital budgeting methods. Select one: a. Internal rate of return; payback period b. Internal rate of return; net present value c. Net present value; payback period d. Modified..

  Economically sound and properly ranks projects

The ________ method is economically sound and properly ranks projects across various sizes, time horizons, and levels of risk, without exception for all independent projects. Modified IRR Profitability Index NPV Discounted Payback Period

  How to calculate the average market price

How to calculate the average market price? Anoi Inc. is about to announce that it will expect to experience rapid growth for the near future with dividends growing at 27% for the next two years, 17% for the following two years, and then its current n..

  Dividends are anticipated to maintain growth rate

The next dividend payment by Wyatt inc will be 3.30 per share. The dividends are anticipated to maintain growth rate of 2.75% forever. If the stock currently sells for 50.20 per share want is the required return?

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