Suppose that SIU's beta is 1.5. If the expected return on the market portfolio is 12% and the risk-free interest rate is 4%, then the expected return for SIU stock is? 16% 8% 13.5% 10%
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- stock expected return beta a 9.01% 1.7 b 7.06% 0.0 c 5.04% 0.67 d 8.74% 0.87 e 11.5% 2.0 Assume the risk-free rate (kRF) is 7%. and the market risk premium is (kM-kRF) is 2%. Which security is best for investment? why? plss show formula and solution not in spreadsheet formQuestion 25 (2.5 points) Listen The risk-free rate is 1.45% and the market risk premium is 5.21%. According to the Capital Asset Pricing Model (CAPM), a stock with a beta of 1.13 will have an %. expected return of 1) 7.34% 2) 15.66% 3) 5.56% 4) 9.12% 5) 13.25%Question 3 Assume that the CAPM holds. Assume also that the expected return on the market portfolio is 10%. If a stock with a beta of 2 has an expected return of 15% in this economy, what is the expected return on a stock with a beta of 0.5?
- ind the Beta for Stock Y given the Expected Return of Stock Y is 20.4% The expected return on the Market Portfolio is 25.5% and Risk-Free Rate is 4.2 %. Select one: a. 0.50 b. 1.2 c. None d. 1.5 e. 0.76What is the beta of a stock where the expected rate of return is 14%, the market premium is 7%, and the risk free rate is 3%? a. 1.90 b. 0.95 C. 1.45 d. 1.57QUESTION 6 Calculate the expected return for C Inc., which has a beta of 0.8 when the risk-free rate is 0.04 and you expect the market return to be 0.12. a. 8.10 percent b. 9.60 percent c. 10.40 percent d. 11.20 percent e. 12.60 percent
- Question 4 The risk-free rate of return is 2.7 percent, the inflation rate is 3.1 percent, and the market risk premium is 6.9 percent.What is the expected rate of return on a stock with a beta of 1.08?Select one:A. 12.22 percentB. 11.47 percentC. 10.15 percentD. 10.92 percentABC Betal 1.05 0.90 Suppose you observe the following situation: Assume these securities are correctly priced. Based on the CAPM, expected return on the market? What is the risk-free rate? XYZ Expected Return 12.3 11.8Find the required rate of return on the market if: beta is 1.23, required return on the stock is 9.50%, and risk-free rate is 2.30% A. 9.87% B. 8.40% C. 8.15% D. 8.72% E. 8.32%
- Question 14 If the simple CAPM is valid and all portfolios are priced correctly, which of the situations below is possible? Consider each situation independently. and assume the rísk-free rate is 2.5%. A) Portfolio Expected Return Beta A 17.5% 1.5 Market 12.5% 1.0 B) Portfolio Expected Return Standard Deviation A 8.5% 18.0% Market 10.0% 24.0% Portfolio Expected Return 13.5% 10.0% Beta A 1.2 Market 1.0 D) Portfolio Expected Return Beta A 7.5% 0.6 Market 10.0% 1.0 Option D Option A Option C Option BThe risk-free rate is 4%. The market risk-premium is 7%. The beta is 20. What is the expected rate of return on this stock? Answers: A.10% B12% C.18% D.20% E. 227. Problem 8.03 (Required Rate of Return) eBook Assume that the risk-free rate is 7.5% and the required return on the market is 11%. What is the required rate of return on a stock with a beta of 2? Round your answer to two decimal places. %