Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Assume that the risk-free rate is 6.5% and the required return on the market is 10%. What is the required
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- A stock has an expected return of 13.4 percent and a beta of 1.15, and the expected return on the market is 12.4 percent. What must the risk - free rate be?arrow_forwardThe following information is provided: The risk-free rate is 2% The expected market returns are 11% If the beta of an asset changes from 0.8 to 1.5, what is the additional return that you require on this asset (in %, please round on 2 decimals)?arrow_forwardIf the expected return from the market is 18%, the risk-free rate is 11%, and the beta of Loschert Corp. is 1.2, what is the required rate of return on Loschert's stock?arrow_forward
- Suppose you invest $100, $410, and $640 of your wealth into a stock, the market, and a risk - free asset, respectively. The beta of the stock is 1.3. What is the beta of the portfolio? Enter your answer rounded to 3 DECIMAL PLACES. Enter your response below.arrow_forwardThe risk-free rate is 6.8 percent, and stock A has an expected return of 15.8 percent. What is the beta of stock A?arrow_forwardRequired Rate of Return Suppose rRF = 3%, rM = 8%, and rA = 7%. Calculate Stock A's beta. Round your answer to one decimal place. If Stock A's beta were 1.1, then what would be A's new required rate of return? Round your answer to one decimal place. %arrow_forward
- 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 an expected return of ____%.arrow_forwarda) Astock has expected return of 10% and a beta of 0.70. Assume the risk - free rate is 5.5%. what must the expected return on the market be? b ) A stock has expected return of 15%, its beta is 1.45, and the expected return on the market is 12%. What must the risk - free rate be?arrow_forwardsuppose the common stock of United Industries has a beta of 1.19 and an expected return of 11.8 percent. The risk-free rate of return is 3.5 percent while the inflation rate is 2.6 percent. What is the expected market risk premium? round to 2 decimal places,arrow_forward
- and the risk-free rate is 2.8 percent. market be? 7 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? return of 11.4arrow_forwardConsider a firm with a beta of 1.57. If the market return is 6.73% and the risk-free rate is 0.90%, what is the firm's expected return according to the capital asset pricing model? Round your answer to four decimal places, e.g., enter 12.34 for 12.34%.arrow_forwardPaycheck, Inc. has a beta of 1.02. If the market return is expected to be 16.90 percent and the risk-free rate is 9.90 percent, what is Paycheck’s risk premium? (Round your answer to 2 decimal places.) Paycheck's Risk Premium: ___.__%arrow_forward
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