A stock has an expected return of 0.15, its beta is 0.52, and the expected return on the market is 0.08. What must the risk-free rate be? (Hint: Use CAPM) Enter the answer in 4 decimals e.g. 0.0123.

Q: ssume that the risk-free rate is 6.5% and the required return on the market is 8%. What is the…

A: Required rate can be calculated from capital assets pricing formula.

Q: Assume that the risk-free rate is 2.5% and the required return on the market is 8%. What is the…

A: According to capital assets pricing model, The expected return on equity stock is calculated as…

Q: Suppose rRF = 9%, ľM = 14% and b; = 13 What is r;, the required rate of return on Stock i?

A: Given: Risk free return (rRF)=9%Market returnrM=14%Beta coefficient(bi)=13

Q: Suppose TRF = 5%, TM12%, and b = 2, what is r, the required rate of return on Stock i? 12% 7% 19% 5%…

A: According to Capital Asset Pricing model ,Ri = Rf + [b * (Rm-Rf) ]whereRi = Required rate of return…

Q: A stock has an expected return of 12.4%, the risk-free rate is 6.5%, and the market risk premium is…

A: In the given problem we require to calculate the Beta of the stock using following details: Expected…

Q: A stock has an expected return of 13%, its beta is 0.79, and the risk-free rate is 5%. What must the…

A: We require to calculate the expected return on the market in this question using following details:…

Q: What is the CAPM required return for Stock Z, in decimal form? Round your answer to 4 decimal places…

A:

Q: A stock has a required return of 15%, the risk-free rate is 7.5%, and the market risk premium is 5%.…

A: CAPM states that the return of the stock and the systematic risk associated with the stock are…

Q: Suppose the nominal rate of return is 0.085 and the risk-free rate is 0.010. What is the risk…

A: Risk premium is the extra return due to the risk involved and it is a rate above the risk free rate.

Q: Assume that the risk-free rate is 6.5% and the required return on the market is 10%. What is the…

A: Risk free rate (Rf) = 0.065 Market return (Rm) = 0.10 Beta (b) = 3 Required rate of return = ?…

Q: Assume that the risk-free rate is 6.5% and the required return on the market is 10%. What is the…

A: To calculate the required rate of return on a stock, we need to use capital asset pricing model…

Q: turns of stock "A" and "B"? Enter your answers as a percentage. Do not put the percent sign in your…

A: To find the expected returns of stocks A and BE(ra)=4.52%E(rb)=6.04%Now, for the standard deviations…

Q: A stock has a required return of 13%, the risk-free rate is 6.5%, and the market risk premium is 3%.…

A: Capital Asset pricing Model (CAPM) is used to determine the required rate of return on investment…

Q: What are the expected returns for stocks Y and Z under the conditions shown below?   A0 0.04…

A: Calculation of Expected Return for Stock Y:

Q: Given the following probability distribution, what is the standard deviation of returns for Security…

A: standard deviation of security is computed by following formula:-standard deviation of security =…

Q: Data: So=102; X = 115; 1 + r=1.1. The two possibilities for ST are 146 and 84. Required: a. The…

A: Step 1:To find the hedge ratio of the put, we need to determine the change in put price relative to…

Q: Given the following probability distribution, what is the standard deviation of returns for Security…

A: Mean= Σ [xi*P(xi)]Standard deviation =sqrt(Σ (xi - x̄)^2*P(xi))

Q: You want to estimate the monthly alpha and beta of AXON stock, using the index model. Suppose AXON…

A: The Single Index Model (SIM) is a financial model that investors use to analyze the risk and return…

Q: 1. Stock B has a beta of 1.2 and a return of 13.1%. Stock D has a beta of 0.8 and a return of 11.0%.…

A: The CAPM model will be used here. CAPM stands for Capital Asset Pricing Model. As per the CAPM model…

Q: A stock has an expected return of 17 percent, its beta is 1.35, and the risk-free rate is 4 percent.…

A: CAPM is capital asset pricing model to compute the cost of equity based on company risk index as…

Q: Stock Z has a beta of 1.4, and its required rate of return is 10.00%. Stock B's beta is 0.80. If the…

A: In the given case, we have provided the stock Z beta, required rate of return and risk free rate.…

Q: A stock has a beta of 1.61, the expected return on the market is 0.07, and the risk-free rate is…

A: Return on stock :— It is the rate of return expected by the investors of stock.    According to CAPM…

Q: Assume that the ridk-free rate is 4% and the required return on the market is 11%.What is the…

A: As per CAPM, Required Rate of return = Risk free rate + (Beta * Market risk premium) Market risk…

Q: Can you explain, when calculating the mean why the probability is included in the calculation? eg…

A: In the financial world, two terms are widely used: i) Ex-ante and ii) Ex-post i) Ex-ante which means…

Q: Suppose the market risk premium is 6% and the​ risk-free interest rate is 5% . Using the data in…

A: Given The risk free rate is 5%Market risk premium is 6%

Q: Future values. Fill in the future values for the following table, using one of the three methods…

A: Future value is the value of current asset or investment at a future data based on assumed rate of…

Q: risk-free rate is 6.5% and the required return on the market is 9%. What is the required rate of…

A: Required rate is expected rate of stock based on the beta of stock that is risk related to the…

Q: Using the following information: MARKET STOCK Z 2018 2.4580 1.9854 CALCULATE: Beta (slope) Alpha…

A: The return on the stock is calculated by adding all dividends received and capital gains realized,…

Q: Suppose the market risk premium is expected to be 8%, a stock has a beta of 1.16, and the T-bill…

A: The Jensen’s alpha of a stock refers to the abnormal returns that the stock provides over the value…

Q: Assume that the risk-free rate is 6.5% and the required return on the market is 8%. What is the…

A: Given: Risk free rate =6.5%Required rate on the market =8%Beta =0.6

Q: A stock has a beta of 1.2 and an expected return of 11.6 percent. If the risk-free rate is 5.1…

A: Given,  Expected return 11.6 percent. risk-free rate is 5.1 percent

Q: Assume the risk free rate is 3.9% and the expected return on the market is 13%. Based on the CAPM,…

A: Given details are : Risk free rate (Rf) = 3.9% Expected market return (Rm) = 13% Beta = 1.25 From…

Q: A stock has an expected return of 15.9 percent and a beta of 1.70, and the expected return on the…

A: The Capital Asset Pricing Model (CAPM) refers to the model which tells us how the financial markets…

Q: Suppose S = $96, K = $100, u = 1.03, d = 0.97, and R = 1.02. The risk-neutral probability, q, that…

A: In this question, we are required to determine the risk-neutral probability.

Q: or part B, is it meant to be the expected return on the stock in all market conditions or should I…

A: A) Formula for Expected Return (x̄)= (R1P1) + (R2P2) + . . . . . + (RnPn)  B) Formula for…

Q: The risk-free rate is 1.13% and the market risk premium is 6.26%. A stock with a β of 0.84 will have…

A: Given: Risk free rate = 1.13% market risk premium = 6.26% Beta = 0.84

Q: A stock has a required return of 11%, the risk-free rate is 3.5%, and the market risk premium is 5%.…

A: The objective of the question is to calculate the beta of the stock and to understand the impact of…

Q: Consider the following collection of n = 9 closing prices for stock ABC:101.02, 102.23, 100.34,…

A: From data we have xx2 101.0210205 102.2310451 100.3410068 99.879974 98.659731.8 96.459302.6…

Q: Q21. Suppose your expectations regarding the stock price are as follows: Time Return 1 0.10 2 -0.15…

A:

Q: You have been looking for stocks that are "good values" and have calculated expected returns for…

A: The minimum return that the investor expects to receive from the investment is referred to as the…

Q: Assume that security returns are generated by the single-index model, Ri a BiRM + ei where R₁ is the…

A: As per the given data Total variance of security =(βi)^2 *(σM)^2 + (σ(ei))^2(βi) = beta of security…

Q: The index model has been estimated using historical excess return data for stocks A, B, and C, with…

A: "Hi there, thanks for posting the questions. But as per our Q&A guidelines, we must answer the…

Q: Ο A stock has a required return of 16%, the risk-free rate is 5.5%, and the market risk premium is…

A: To calculate the stock's beta and then determine the effect of an increase in the market risk…