11.4 CAPM Suppose the risk-free rate is 8 percent. The expected return on the market is 14 percent. If a particular stock has a beta of .60, what is its expected return based on the CAPM? If another stock has an expected return of 20 percent, what must its beta be? (See Problem 13.)

Question 4 A stock has an expected return of 13.6 percent, the risk - free rate is 3.7 percent, and the market risk premium is 7.1 percent. What must the beta of this stock be?

a) Astock has expected return of 10% and a beta of 0.70. Assume the risk - free rate is 5.5%. what must the expected return on the market be? b ) A stock has expected return of 15%, its beta is 1.45, and the expected return on the market is 12%. What must the risk - free rate be?

Suppose you observe the following situation:  Security Ruby Pearl    Expected Return 14.9% 21.0%    Beta 0.70 2.13     A). If these two securities are correctly priced, calculate the risk-free rate. Round your answer to 4 decimal points.  B). If these two securities are correctly priced, find the market risk premium (using the findings of Requirement-A). Round your answer to 4 decimal points.  C). If the current market data shows that the risk-free rate is 3.52 percent, are these securities fairly priced? Comment on your answer. Round your answers to 4 decimal points.  D). Calculate the expected return and beta of an equally weighted portfolio of these two securities. Round your answers to 3 decimal points.

15 A stock with a beta of zero would be expected to have a rate of return equal to  Group of answer choices  the risk-free rate  the market rate of return  the market risk premium  zero

Q6-Suppose that the rate of return on investment- free has risk %8 and the expected return rate for the market %14. If the particular stock his given B = 0.60 - What is the expected return rate based on CAPM? -How much the Beta of another stock that has required return 0.20 ?

Capm

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7. According to the CAPM, what is the expected rate of return for a stock with a beta of 1.2, when the risk-free rate is 6% and the market risk premium is 12%? A. 7.2%. B. 14.4%. C. 13.2%.

What is the expected return for Stock A if it has a beta of 1.25, the risk-free rate is 1.5%, and the expected market return is 10.2%? 12.38% 14.25% 12.75% 11.25% 10.88%