4. Suppose the risk-free rate is 5%, and the average investor has a risk-aversion coefficient of, and the standard deviation of the market portfolio is 20%. A. What is the expected return on the market portfolio? B. Suppose we estimate the beta of Delta as. Based on the CAPM's expected return-beta relationship, what is the expected rate of return on Delta? C. Suppose Delta is considering a new airline route and it forecasts an internal rate of return of 11% on the investment. Based on the estimated expected return on Delta in Question B, do you have to accept or reject the new project as a financial manager?

Use the expected return-beta equation from the CAPM. What is the expected return for a stock if the risk-free rate is 4%, beta 0.9 and the expected return for the market portfolio is 6%? What is the risk-free rate if beta is 1.1, the expected return 6.3% and the expected return for the market portfolio is 6%?  What is beta if the risk-free rate is 4%, the expected return 11% and the expected return for the market is 6%?  What is the expected return for the market if the risk-free rate is 4%, beta 0.9 and the expected return 11%?

The risky portfolio expected return and standard deviation is 14% and 20%, respectively. The risk free rate is 5%. The risk aversion coefficient A is 2.5 and 4 for Mary and Kim, respectively. Answer the following questions: A. Who is more risk averse? B. What is the capital allocation y to the risky portfolio for each investor? C. Suppose investors have the following utility function: U = E(R) - ¹2 Ao² Calculate the Utility level for each investor's optimal complete portfolio.

This question must be answered using APT i think

In this problem we assume that the annual expected rate of return of the market portfolio is 22% and the annual risk-free rate is 2%. The standard deviation of the market portfolio returns is 22%. Assume the market is in equilibrium such that the Capital Asset Pricing Model (CAPM) holds: the market portfolio is efficient. If you have $1,000 to invest, how should you allocate it to achieve an annual expected return of 26%? Invest $260 in the risk-free asset and $740 in the market portfolio Invest $800 in the risk-free asset and $200 in the market portfolio Invest $1,200 in the risk-free asset and sell short $200 in the market portfolio Borrow $260 at the risk-free rate and invest $1,260 in the market portfolio Invest $200 in the risk-free asset and $800 in the market portfolio Borrow $200 at the risk-free rate and invest $1,200 in the market portfolio

An investment has probabilities 0.15, 0.34, 0.44, 0.67, 0.2 and 0.15 of giving returns equal to 50%, 39%, -4%, 20%, -25%, and 42%. What are the expected returns and the standard deviations of returns?

According the picture, Find:a) the expected return and standard deviation on this portfolio. b) the expected return on the market using portfolio beta if Rf=5%.