What is the expected return on an asset

Assignment Help Finance Basics
Reference no: EM13529082

Suppose that CAPM holds, the riskfree rate is Rf = 2% and the expected return on the market portfolio is E[Rm] = 12%. The standard deviation of the market return is 20%.
a) What is the expected return on an asset that has β = 1.5 with the market return?
b) What is the beta of a portfolio that has E[Rp] = 11%?
c) A security return Ri has a covariance of σi,m = 0.1 with the market return. What is the expected excess return E[Ri] - Rf ?

Reference no: EM13529082

Questions Cloud

What is the longest hole in one that the golfer can make : A golfer imparts a speed of 29.3 m/s to a ball, and it travels the maximum possible distance before landing on the green. What is the longest "hole in one" that the golfer can make, if the ball does not roll when it hits the green
Compute the quantity of sodium fluoride in kilograms : Calculate the quantity of sodium fluoride in kilograms needed per year for a city of 50,000 people if there daily consumption of water per person is 170 gallons. (Sodium fluoride is 45.0 percent fluorine by Mass. 1 gallon=3.79 liters, density of w..
Determine what is the patients near point : A patient is going to be prescribed bifocals which will be 3.20 cm from the eye. what is the patient's near point
State a hypothetical inner-sphere redox mechanism : Write a hypothetical inner-sphere redox mechanism for the reaction of [Cr(H2O)6]2+ with cis-[Co(NH2CH2CH2NH2)2I2]+ (aq) in acid solution to give (ultimately) cis-[Cr(H2O)4I2]+, Co2+(aq), and [NH3CH2CH2NH3]2+."
What is the expected return on an asset : What is the expected return on an asset
Which type of cloning vecotroccurs in nature : In gel electrophoresis, which ofthe following DNA fragments would travel the farthest distance fromthe sample well? Which type of cloning vecotroccurs in nature?
How many us dollars must be raised : How many U.S. dollars must be raised if payment is due today, is the dollar appreciating or depreciating against the yen? Explain - How many U.S. dollars must be raised if payment is due in 90 days?
Explain how many grams of naphthalene are in the solution : The density of toluene (C6H5CH3) at 25 °C = 0.862 g/mL, and its vapor pressure at 25 °C = 28.44 torr. At 25 °C, the vapor pressure of toluene above a solution of naphthalene (C10H8) in 500.0 mL toluene is found to be 27.92 torr. How many grams of ..
Find the work done by the gravitational force on the bob : A simple pendulum consists of a small object of mass m (the "bob") suspended by a cord of length l of negligible mass. A force F is applied in the horizontal direction (so F is Fi), Determine the work done by the gravitational force on the bob

Reviews

Write a Review

Finance Basics Questions & Answers

  What will be effect of price increase on the firm fcf

Management anticipates an increased working capital need of $3,000 for the year. What will be the effect of the price increase on the firm's FCF for the year?

  The botolph corporation produces botolph inators

The Botolph Corporation produces botolphinators

  Compute the current price of common stock

The last dividend paid by xyz company was 1. XYZ growth rate is expected to be a constant 5 percent. XYZ's required rate of return on equity is 10%.

  Corporation''s benefit

IF JAR Inc's 2008 TAXABLE INCOME WAS $85,000. AND IF 2009 TAXABLE LOSS IS $35,000, the TAX RATE 40% WOULD IT BE POSSIBLE TO UTILIZE THE TAXABLE LOSS FROM 2009 TO THE CORPORATION'S BENEFIT

  Comparing the value of stock

Mr. Arthur recently bought a block of 100 shares of Bingham Company common stock for $6,000. The stock is expected to provide an annual cash flow of dividends of $400 indefinitely.

  How would this be expected to affect the profits earned

If Decko Co. had established its subsidiary in Tokyo, Japan, instead of China, would its subsidiary's profits be more exposed or less exposed to exchange rate risk.

  What is the nominal rate

If the effective rate is 12%. What is the nominal rate if compounding is daily. Do not enter the symbol % in your answer. Simply enter the answer in percentages rounded off to two decimal points.

  What is the break-even point in units for the company

Rocky Mount Metals Company manufactures an assortment of wood-burning stoves. The average selling price for the various units is $500. The associated variable cost is $350 per unit. Fixed costs for the firm average $180,000 annually.

  Fasb fair value-time value of money tools

Explain the concepts of present value and discuss your interpretation of their value as assessment tools for accountant or operator (include an example).

  Issuing new shares of common stock

Cayman's Crafters is also considering issuing new shares of common stock.

  Shoplift security company is interested in bidding on a

the no- shoplift security company is interested in bidding on a contract to provide a new security system for a large

  An equally weighted portfolio consists of 62 assets which

an equally weighted portfolio consists of 62 assets which all have a standard deviation of 0.406. the average

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