FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%
Assume the expected return on the market is 18 percent and the risk-free rate is 4 percent.
What is the expected return for a stock with a beta equal to 2.00? (Round answers to 2 decimal places, e.g. 0.25.)
Expected return |
What is the market risk premium |
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
Similar questions
- Assume that the risk-free rate is 6.5% and the market risk premium is 8%. What is the required return for the overall stock market? Round your answer to one decimal place. % What is the required rate of return on a stock with a beta of 0.6? Round your answer to one decimal place. %arrow_forwardStock A has an expected return of 13.52 percent. Stock B has an expected return of 9.24 percent. Assuming the Capital Asset Pricing Model holds, and Stock A's beta is greater than Stock B's beta by 0.32, what is the expected market risk premium (in percent)? Answer to two decimalsarrow_forwardAssume CAPM holds. What is the correlation between an efficient portfolio and market portfolio? a. 1 b.-1 c.0 d. Not enough information Assume CAPM holds. The risk-free rate is 1% and the expected return on the portfolio is 5%. What is the expected return of a stock with a beta of 2? 70%arrow_forward
- A stock has an expected return of 18.00%. The risk-free rate is 1.45% and the market risk premium is 9.30%. What is the β of the stock?arrow_forwardStock 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_forwardand 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_forward
- A stock's beta is 1.5 and the market risk premium is 5.6%. If the risk-free rate is 2.9%, what is the stock's required return according to CAPM? Answer as a percent and round to 2 decimal places. Answer: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_forwardAssume that the risk-free rate is 2.5% and the required return on the market is 12%. What is the required rate of return on a stock with a beta of 2? Round your answer to two decimal places.arrow_forward
- Assume that the risk-free rate is 7.5% and the market risk premium is 3%. What is the required return for the overall stock market? Round your answer to one decimal place. _________ % What is the required rate of return on a stock with a beta of 1.8? Round your answer to one decimal place. _____________ %arrow_forwardIf the risk free rate is 4.4%, the expected return on the market portfolio (i.e., Rm)( is 11.6%, and the beta of Stock B is 0.9 , what is the required rate of return for Stock B according to the Capital Asset Pricing Model (CAPM)? (Round your answer rounded to one decimal place and record without a percent sign). Your Answer: If the risk free rate is 1.2%, the market risk premium (i.e., Rm - Rf) is 13.5%, and the beta of Stock B is 1.9 , what is the required rate of return for Stock B according to the Capital Asset Pricing Model (CAPM)? (Round your answer rounded to one decimal place and record without a percent sign). Your Answer:arrow_forwardAssume that the risk-free rate is 6.5% and the required return on the market is 10%. What is the required rate of return on a stock with a beta of 3? Round your answer to two decimal places. %arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education