Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
A stock has an required return of 16.5 percent, its beta is 1.75, and the risk-free rate is 2.75 percent. The expected return on the market must be
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Stock A has a beta of 1.30, and its required return is 13.25%. Stock B's beta is 0.90. If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)arrow_forwardA stock has an expected return of 11.0%, its beta is 0.95, and the risk-free rate is 6.00%. What must the expected return on the market be?arrow_forwardA stock has a beta of 1.1. The expected return on the market is 6.18 percent and the risk free rate is 2%. According to the CAPM model what is the expected return on the stock?arrow_forward
- A stock has a required return of 10%; the risk- free rate is 3.5%, and the market risk premium is 4%. a. What is the stock's beta? b. If the market risk premium increased to 10%, what would happen to the stock's required rate of return?arrow_forwardA stock has an expected return of 15.75 percent. The beta of the stock is 1.9 and the risk-free rate is 5 percent. What is the market risk premium?arrow_forwardA stock has a beta of 1.05, the expected return on the market is 10.2 percent, and the risk-free rate is 5.4 percent. What must the expected return on this stock be?arrow_forward
- The expected return on Hilo stock is 15.05 percent while the expected return on the market is 13.3 percent. The beta of Hilo is 1.37. What is the risk-free rate of return?arrow_forwardA stock has an expected return of 18 percent and a beta of 1.4. The risk-free rate is 3.5 percent. What is the slope of the security market line? O 11.92 percent 10.36 percent 12.08 percent 13.85 percentarrow_forwardb. A stock has an expected return of 14 percent, the risk-free rate is 4 percent, and the market risk premium is 6 percent. What must the beta of this stock be?arrow_forward
- According to the CAPM, what is the expected return on a security given market risk premium of 13%, a stock beta of 1.77, and a risk free interest rate of 2%? Put the answer in decimal place.arrow_forwardA stock has a beta of .89 and an expected return of 9.2 percent. If the stock's reward-to-risk ratio is 6.17 percent, what is the risk-free rate?arrow_forwardQuestion: A stock has an expected return of 10.9 percent, the risk-free rate is 3.1 percent, and the market risk premium is 6.9 percent. What must the beta of this stock be?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
- Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningCorporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education