Assume that the risk-free rate is 3.5% and the required return on the market is 11%. What is the required rate of return on a stock with a beta of 2? Round your answer to two decimal places

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: A stock has a required return of 12%, the risk-free rate is 2.5%, and the market risk premium is 5%.…

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

Q: A stock has a required return of 8%, the risk-free,rate is 3.5%, and the market risk premium is 2%.…

A: Required return: 8%Risk free rate: 3.5%Market risk: 2%a. Beta=(Required return-Risk free rate) /…

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: Assume rhat the risk-free rate is 5.5% and the market rate  premium is 6%. A) What is the required…

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

Q: The current risk-free rate of return, rRF, is 4 percent and the market risk premium, RPM, is 8…

A: The formula to calculate the required rate of return using CAPM is as follows:Return = Riskfree rate…

Q: Assume that the risk-free rate is 6.00% and the market risk premium is 6.75%. What is the expected…

A: Given: Risk free rate=6% Market risk premium = 6.75%

Q: stock has a required return of 8%, the risk-free rate is 3.5%, and the market risk premium is 3%. a.…

A: CAPM is an abbreviation used for Capital asset pricing model. This model is used to determine the…

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: Stock R has a beta of 1.5, Stock S has a beta of 0.95, the required return on an average stock is…

A: Required rate of return is defined as the minimum return regarding an investor, which is used to…

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: Assume that the risk-free rate is 3.5% and the expected return on the market is 10%. What is the…

A: Details given to us are : Risk free rate = 3.5% Expected return on market = 10% Beta = 0.7 We need…

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: Johnson Corporation stock has a beta of 0.74. What is its expected return?

A: As per the Capital Asset pricing model expected return can be calculated using the formula given…

Q: A stock has a required return of 13%, the risk-free rate is 3%, and the market risk premium is 6%.…

A: Beta means the measure of changes in the stock in connection with the entire market.  Beta is…

Q: A stock has a required return of 7%, the risk-free rate is 2.5%, and the market risk premium is 3%.…

A: Required rate of return as per CAPM  :— Expected Return = Rf + (Rm - Rf) beta of the…

Q: Assume the risk-free rate is 5% and the market return is 12%. If inflation increases in the market…

A: A line that is drawn on a chart to depict the capital asset pricing model graphically is called the…

Q: Suppose the risk-free return is 4.2% and the market portfolio has an expected return of 11.4% and a…

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

Q: Required Rates of Return Suppose that the risk-free rate is 5% and that the market risk premium is…

A: To calculate the required return we will use the below  formula   Required return = Risk free…

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: A stock has a beta of 1.9. The risk-free rate is 2%. Assume that the CAPM holds. What is the…

A: According to CAPM (Capital asset pricing model) ,k =Rf+[ b*(Rm-Rf)]wherek= expected return for the…

Q: Suppose the risk-free return is 6.3% and the market portfolio has an expected return of 11.5% and a…

A: The objective of the question is to calculate the expected return of Johnson & Johnson…

Q: A certain stock has a beta of 1.3. If the risk-free rate of return is 3.9 percent and the market…

A: Expected return on a stock implies the returns expected on a stock after taking into consideration…

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: The expected return on stock A is 11.70 percent. The expected return on stock B is 9.40 percent.…

A: The objective of the question is to calculate the risk premium using the Capital Asset Pricing Model…

Q: A stock's beta is 1.6 and the market risk premium is 7.7%.  If the risk-free rate is 3.5%, what is…

A: Capital Asset Pricing Model ( CAPM) is an alternative model to find out the required rate of return…

Q: Stock R has a beta of 1.5, Stock S has a beta of 0.85, the required return on an average stock is…

A: Investors want to be compensated for risk and time worth of money. The risk-free rate in the CAPM…

Q: Assume that the risk-free rate is 6% and the required return on the market is 10%. What is the…

A: The formula used as follows: Required rate of return=rRF+Beta rM-rF

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: Calculate each stock's required rate of return. Round your answers to two decimal places. rx = ry…

A: Introduction: Capital asset pricing model is the widely used financial model which is used in…

Q: answer each part correctly PLEASE.

A: Capital asset pricing model (CAPM) is a tool used to measure the expected return on an investment.…

Q: What is the required return on an investment with a beta of 1.4 if the risk-free rate is 2.2 percent…

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

Q: A stock has an expected return of 10.99 percent, the risk-free rate is 2.46 percent, and the market…

A: Expected return = 10.99%Risk-free rate = 2.46%Market risk premium = 4.95%To find: Beta of the stock.…

Q: The stock market can have three potential returns with the following probabilities. Note "otherwise"…

A: Otherwise probability= 1- (0.24+0.38) = 0.38Expected return = (0.24*-0.04( + (0.38*0) + (0.38*0.18)=…

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: A stock has an expected return of 7.72 percent, the risk-free rate is 2.9 percent, and the market…

A: We can calculate Beta by using the CAPM model as it helps in showing the relationship between the…

Q: Stock R has a beta of 1.4, Stock S has a beta of 0.95, the expected rate of return on an average…

A: The required return of the stock is calculated using the Capital asset pricing model(CAPM ).    The…

Q: A stock has an expected return of 16.4%, its beta is 1.3, and the expected return on the market is…

A: Following details are given to us in the question: Expected return of stock = 16.4% Beta = 1.3…

Q: A stock has a required return of 9%; the risk- free rate is 4%; and the market risk premium is 3%.…

A: In the given question we are require to calculate the Beta: We can calculate the Beta using Capital…

Q: Stock R has a beta of 2.0, Stock S has a beta of 0.75, the required return on an average stock is…

A: Given, The Beta of Stock R is 2 The beta of stock S is 0.75 Average stock return is 14% Risk free…