and the risk-free rate is 2.8 market be? 16. Using CAPM A stock has an expected return of 10.2 percent and a beta of .91, and the expected return on the market is 10.8 percent. What must the risk-free rate be? of 114

Q: Expected Return CAPM If you know that the risk-free rate is 4.5% and the expected market risk…

A: CAPM is a model which is used to calculate the expected rate of return on the basis of the risk-free…

Q: The CRT Co. has a beta of 1.6 The expected market return is 9.5 percent and the risk free rate of…

A: Given that;Expected market return is 9.5%Risk free rate is 3.2%Beta is 1.6

Q: Suppose that Company ABC has a beta of .92.  The expected return on the market is 13% and the market…

A: Market return (Rm) = 0.13Market risk premium (Mp) = 0.102Beta of the stock (b) = 0.92Expected return…

Q: A stock has an expected return of 15.7 percent, the risk-free rate is 6.25 percent, and the market…

A: Given The expected return is 15.7 percent Risk free rate is 6.25% Market risk premium is 7.6%

Q: The risk-free rate is 4%. The market risk-premium is 7%. The beta is 2.0. What is the expected rate…

A: Financial statements are statements which states the business activities performed by the company .…

Q: Industry stock has a beta of 1.8, the risk-free rate is 4.40%, and the market risk premium (MRP) is…

A: CAPM stands for Capital Asset Pricing Model which indicates the relation between the expected…

Q: Using CAPM A stock has an expected return of 13 percent, the risk-free rate is 4.5 percent, and the…

A: Given details are : Expected return = 13% Risk free rate = 4.5% Market risk premium = 7% We need to…

Q: jerilu markets has a beta of 1.23 the risk free rate of return is 2.10 percent and the market rate…

A: Step 1 The investment return that an asset is anticipated to generate over and above the risk-free…

Q: Consider the CAPM. The risk - free rate is 4%, and the expected return on the market is 15% .…

A: Risk-free Rate, Rf = 4%Beta = 1.2Expected return on market = 15%

Q: Based on the CAPM model, what should be the expected return for a stock with a beta of 2.1 when the…

A: The Capital Asset Pricing Model (CAPM) is used to calculate the expected return of a stock based on…

Q: The risk-free rate is 4%%. The market risk-premium is 79%. The beta is 20. What is the expected rate…

A: Financial management consists of directing, planning, organizing and controlling of financial…

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: The risk-free rate is 3.7 percent and the expected return on the market is 12.3 percent. Stock A has…

A: If expected return is more than required return then security is undervalued.If required return is…

Q: Assume that the risk-free rate is 4% and the expected return on the market is 11.5%. What is the…

A: The Capital Asset Pricing Model (CAPM) is a tool used in finance to estimate the cost of equity,…

Q: A stock has a beta of 1.16, the expected return on the market is 11 percent, and the risk-free rate…

A: To calculate the expected return on this stock we will use the below formula   Expected return =…

Q: The risk-free rate of return is 3.7 percent and the market risk premium is 6.2 percent. What is the…

A: The given question can be solved using capital asset pricing model (CAPM)

Q: What is the beta of a firm whose equity has an expected return of 21.3 percent when the risk - free…

A: Beta shows the systematic risk of the asset. The beta of the asset increases the expected rate of…

Q: The market rate of return is 12.5% and the risk-free rate is 3.5%. What will be the change in a…

A: Expected return = Risk free rate + beta * (market rate -risk free rate)

Q: The expected return on Share X is 15.75% while the risk-free rate of return is 7%. If the expected…

A: Expected return =Rf + beta * ( Rm- Rf) Rf = Risk free rate Rm =Expected return on market

Q: The expected return of a stock with a beta of 1.2 is 16.2%. Calculate the market risk premium and…

A: Information given in ques is as follows: Expected return on Stock = 16.2% Beta = 1.2 Risk free rate…

Q: What is the expected return on a stock with a beta of 1.40, if the riskless rate is 4% and the…

A: In this question we need to find expected return according to CAPM. According to CAPM: Expected rate…

Q: A stock has a beta of .85, the expected return on the market is 11 percent, and the risk-free rate…

A: Expected rate of return is the rate of return that the investor expects on their investment…

Q: A stock has an expected return of 14.1 percent, a beta of 1.8, and the return on the market is 9.8…

A: Expected return (Re) = 14.1% Beta (B) = 1.8 Market return (Rm) = 9.8% Risk free rate = Rf

Q: The risk-free rate of return is 3.9 percent and the market risk premium is 6.2 percent. What is the…

A: Capital Asset Pricing Model : This model is used to calculate the expected rate of return or cost of…

Q: The risk free rate is 9.5%. If the market portfolio has a mean return of 6.6%, what security market…

A: The capital assets pricing model has been represented by the SML  line which gives you required rate…

Q: Stock Y has a beta of 0.9 and an expected return of 11.4 percent. Stock Z has a beta of 1.5 and an…

A: Expected return is an important metric in investment analysis, as it helps investors assess the…

Q: 1.The risk-free rate of return is 2.6 percent and the market risk premium is 10 percent. What is the…

A: We need to find out the expected return of the stock by using Capital Asset Pricing Model (CAPM).…

Q: Suppose the market premium is 12%, market volatility is 20% and the risk-free rate is 6%.  Suppose…

A: Expected return E(R) = rf + beta*Risk/market premium Where rf is risk free rate.

Q: Consider the CAPM. The expected return on the market is 18%. The expected return on a stock with a…

A: We are given following details : Expected return on market = 18% Beta = 1.2 Expected return on stock…

Q: The risk-free rate of return is 3.75 percent and the market risk premium is 6.5 percent. What is the…

A: Risk free rate of return = rf = 3.75% Market risk premium = mrp = 6.5% Beta = b = 0.84

Q: Stock Y has a beta of 1.35 and an expected return of 14.30 percent. Stock Z has a beta of 0.75 and…

A: Formula: Expected return = Risk free rate + (Beta*Market risk premium)

Q: A stock has an expected return of 11 percent, its beta is 95, and the risk-free rate is 6 percent.…

A: We need to use CAPM to calculate expected rate of return. The equation is Ri=Rf + Beta(Rm-Rf) Where…

Q: The risk-free rate of return is currently 0.03, whereas the market risk premium is 0.04. If the beta…

A: Following details are given in the question: Risk free rate of return = 0.03 = 3% Market Risk…

Q: A stock has an expected return of 16 percent, its beta is 0.6, and the risk-free rate is 6.4…

A: Given the following information: Expected return on stock (r) = 16% Beta (b) = 0.6 Risk free rate…

Q: A stock has an expected return of 14.3 percent, the risk-free rate is 3.2 percent, and the market…

A: Formula Expected return = Risk free rate+(Beta*Market risk premium) Where Expected return = 14.3%…

Q: Suppose that the CAPM is a good model of risk in the stock market. Suppose also that the average…

A: Excess return on stocks = 10%Risk-free rate = 1%

Q: A stock as a beta of 0.9 and the market expects to return 12.0%. If the risk free rate is 2.0%, what…

A: CAPM is the capital assets pricing model used to calculate the required rate of return based on the…

Q: Stock COOL has an expected return of 12.97 %. The expected market return is 11.72% and the risk-free…

A: Here,Expected Return is 12.97%Expected Market Return is 11.72%Risk Free Rate is 3.36%

Q: What must the expected return on the market be?

A: Introduction: The expected return of market is considered to be an important concept because it is…

Q: A stock has a beta of 1.68, the expected return on the market is 14.72, and the risk-free rate is…

A: As per CAPM formula Expected return on stock = Risk free return + Beta*(Market return-Risk free…

Q: A stock has an expected return of 13.4 percent and a beta of 1.15, and the expected return on the…

A: The Capital Asset Pricing Model (CAPM) is a financial model that establishes a relationship between…

Q: A stock has a beta of 1.15, the expected return on the market is 11% and risk free rate is 3%. What…

A: According to Capital asset pricing model ( CAPM),Re = Rf +[ beta × ( Rm - Rf)]Where,Re = expected…

Q: The risk-free rate is 6.8 percent, and stock A has an expected return of 15.8 percent. What is the…

A: In order to calculate the beta of  market the  capital Asset pricing models , the three variables…

Q: Consider the CAPM. The risk-free rate is 6%, and the expected return on the market is 18%. What is…

A: In the given question we need to calculate the expected return on a stock using CAPM i.e. Capital…

Q: A2) The risk-free rate of return is 2.8 percent, the inflation rate is 3.1 percent, and the market…

A: Answer  Formula for  Expected Return : ER  ER  = Rf + beta ( Rm - Rf )

Q: The risk-free rate is 2.58% and the market risk premium is 4.31%. A stock with a β of 1.22 will have…

A: Introduction: The term expected return refers to the anticipated loss or gain by an investor from…

Q: a) Astock has expected return of 10% and a beta of 0.70. Assume the risk - free rate is 5.5% . what…

A: Required rate is the expected rate from stock by investors based on the risk involved on the stock…

Q: A stock has a beta of 1.5 and an expected return of 16.35%. What is the risk-free rate if the market…

A: We will use and apply the CAPM model here. CAPM stands for Capital Asset Pricing Model. This model…