Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
You observe the following statistics in the market. The stock of YUM! Brands Inc. (the holding company of KFC, Taco Bell and Pizza Hut among others) costs $66.24 today. Analysts estimate that it will cost $71.06 one year from today and will pay a dividend of $1.14. The estimated beta for YUM! is 0.83. Microsoft (MSFT) stock sells for $31.74. Analysts estimate that it will cost $32.46 in exactly one year and that the annual dividend paid during the year will be $0.80. The estimated beta for MSFT is 0.97. Calculate the expected return for each stock. Assume that these securities are correctly priced and that analyst estimates are correct. Based on the CAPM, what is the expected return on the market portfolio? What is the risk-free rate? These are real data (source YahooFinance). Do the answers you derive here match your knowledge of current T-Bill rates in the market? Do you still trust the analysts? Hint: If the CAPM is correct, then the security market line implies that all assets have the same risk premium, so you may solve for the risk-free rate by setting the reward to risk ratios of YUM! equal to those of MSFT.
The reward to risk ratio = (the expected return on the asset - Risk Free rate)/Beta_asset
The purpose of this memorandum is to outline in sufficient detail the terms of the audit engagement. In planning the audit engagement for Toy Local Corporation for the year ended O
There are 5 primary steps in assessing risk in the workplace wrt to H&S, identify 3 and discuss the what actions should be taken to manage or negate the risks posed - The sect
Problem: Warming Up Luke likes to consumer CDs (good1) and pizzas (good 2). His preference over both goods is given by the utility function If Luke allocates $200 to spe
International Risk: International risk can include exchange rate risk and country risk. (i) Exchange Rate Risk: All investors who invest internationally in today's increasing
identify risks faced by a banking institution and ways of preventing them
Risk Premium A risk premium is the extra or excess which is return on a risky asset relative to the return on risk-free assets. Therefore, it defines the additional return that
Question: Under Section 6 of the Occupational Safety and Health Act 2005, employers have a statutory duty to prepare and keep revised a written statement of their safety and he
explain the risk involves in swap business
Data Security: An important issue for all organisations is the security of data. Just as documentation require physical security in the face of risk of theft / fire etc, electr
Risk management decisions and practices should be transparent Risk management should include the identification and systematic documentation of all elements of the risk managem
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd