Find the Risk Free Rate given the cost of equity 12%, the Expected Return on Market Portfolio is 16% and the Beta for Stock Y is 0.6.

Q: Suppose the risk-free return is 4% and the market portfolio has an expected return of 10% and a…

A: Calculation of 3M's beta with respect to market: Beta of 3M is determined by multiplying the…

Q: According to CAPM estimates, what is the cost of equity for a firm with a beta of 1.5 when the…

A: In the given question we are require to calculate the cost of equity for the firm using CAPM.

Q: Suppose MegaChip has a beta of 1.3, whereas Littlewing stock has a beta of .7. If the risk-free…

A: Given the following information: Beta of MegaChip: 1.3 Beta of Littlewing: 0.7 Risk free rate: 4%…

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

A: Using CAPM

Q: If the risk free rate is 6 %, the expected return on the market portfolio is 12% and the beta of…

A: The Capital Asset Pricing Model (CAPM) is the model which shows the relationship between the…

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: The expected return for a stock, calculated using the CAP M is 10.5%. The market free return is 9.5%…

A: In the given question we are require to calculate the risk free rate : We can calculate the risk…

Q: Moerdyk Company stock has a beta of 1.40, the risk free rate is 4.30%, and the market premium is…

A: Beta = 1.40 Risk free rate = 4.30% Market premium = 5.50%

Q: Please help me with 11-6 ??‍♀️

A: Introduction : Risk free rate =4% Market risk  premium = 5% Beta coefficient =2.0 Using CAPM…

Q: A stock has an expected return of 11 percent, the risk-free rate is 6.1 percent, and the market risk…

A: Beta: The volatility of a stock in relation to the entire market is measured by its beta. Individual…

Q: Presently, the risk-free rate is 4 percent (Rf )and the expected return on the market portfolio…

A: required return = risk free rate + beta*market risk premium GM required return = 4% + 1.2*(9 - 4)% =…

Q: The risk free rate is 5% and the expected return on the market portfolio is 13%. A stock has a beta…

A: The expected return is the return that the individual expected to gain in the investment over the…

Q: Suppose the risk-free return is 7.9% and the market portfolio has an expected return of 11.5% and a…

A: Risk free rate = 7.9% Stock beta = 0.77 Market return = 11.5%

Q: A stock has an expected return of 13.1 percent, its beta is 1.70 and the risk free premium rate is…

A: Risk market return is used in CAPM model to calculate expected return on the stock and it is also…

Q: The current risk-free rate of return is 2.5 percent and the market risk premium is 5 percent. If the…

A: The return which the investors are expected in order to invest in specific securities is referred to…

Q: JaiLai Cos. stock has a beta of 0.8, the current risk-free rate is 6.2 percent, and the expected…

A: The provided information are: Beta = 0.80 Expected return = 12% Risk free rate = 6.2%

Q: Beta and required rate of return A stock has a required return of 11 percent; the risk-free rate is…

A: In the given question we require to compute the beta of stock from below details : Required return =…

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: A stock has a beta of 1.2 and an expected return of 11.8 percent. A risk-free asset currently earns…

A: Portfolio refers to basket of different financial assets in which investment is made by single…

Q: If the expected return on the market is 16%, then using the historical risk premium on large stocks…

A: In the given problem we require to calculate the risk free rate from following details: Expected…

Q: The risk-free rate is 3 percent, the expected return on the PSEi is 13 percent, and its standard…

A: Here, Risk Free Rate is 3% Expected Return of Market is 13% Standard Deviation of Market is 23%…

Q: Assume that the risk-free rate is 5 percent and the market risk premium is 6 percent. What is the…

A: This question has two parts: First we need to compute the Expected return of overall stock market…

Q: Presently, the risk-free rate is 4 percent (Rf )and the expected return on the market portfolio…

A: A model that represents the relationship of the required return and beta of a particular asset is…

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: Find the Risk Free Rate given the cost of equity 12%, the Expected Return on Market Portfolio is 16%…

A: Given: Expected return = 12% Market rate = 16% Beta = 0.6

Q: The stock of Big Joe's has a beta of 1.50 and an expected return of 12.60 percent. The risk-free…

A: Given: Beta = 1.50 Expected return = 12.60% Risk free rate = 5.1%

Q: If the expected return from the market is 18%, the risk-free rate is 11%, and the beta of Loschert…

A: The term beta of a stock represents the responsiveness of a particular stock in relation to the…

Q: JaiLai Cos. stock has a beta of 0.7, the current risk-free rate is 6.1 percent, and the expected…

A: CAPM model provides formula that calculates the expected return on stock based on its level of risk.…

Q: If the expected return on a stock is 6 per cent. Risk free rate of return is 2 per cent and market…

A: Capital asset pricing model (CAPM) formula: Expected return = Risk free rate + (Beta *(Market rate -…

Q: Suppose the risk-free return is 4.5% and the market portfolio has an expected return of 10.3% and a…

A: According to the market scenario, the stock prices are keep on changing with the changing market…

Q: If the risk free rate is 4 9%, the expected return on the market portfolio is 1296 and the beta of…

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

Q: Find the Risk-Free Rate given the Expected Return on Stock Y is 20 %, the Expected Return on Market…

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

Q: The risk-free rate of return is 4 percent and the market risk premium is 8 percent. What is the…

A: In given question we need to compute the expected rate of return for stock.

Q: The expected return on the market is 15%, the risk-free rate is 8o/o, and the beta for Stock B is…

A: Given: The expected return = 15% = 0.15 Risk free rate = 8% = 0.08 Beta for stock = 0.8

Q: A stock has an expected return of 11.25 percent, a beta of 0.82, and the expected return on the…

A: Capital asset pricing model is used to compute the expected return from a stock: Here, Expected…

Q: FlavR Company stock has a beta of 2.14, the current risk-free rate is 2.14 percent, and the expected…

A: Beta = 2.14 Risk free rate = 2.14% Market return = 9.14%

Q: Consider the CAPM. The risk-free rate is 5%, and the expected return on the market is 15%. What is…

A: In the above question we need to calculate the value of beta. Looking at the information given in…

Q: Using CAPM A stock has an expected return of 10 percent, its beta is .70, and the risk-free rate is…

A: This question require us to compute the expected return on the market i.e. Rm

Q: A stock has an expected return of 12.7 percent and a beta of 1.18, and the expected return on the…

A: Given information: Expected return is 12.7% Beta value is 1.18 Expected return on market is 11.7%

Q: When the return on the market portfolio goes up by 5%, the return on Stock A goes up on average by…

A: A portfolio is defined as a group or a collection of various financial assets or commodities that…

Q: Suppose the risk-free return is 2% and the market portfolio has an expected return of 12% and a…

A: Beta=Volatility of stock x correlation with market /volatility of market  Expected return =Risk free…

Q: Solve the following questions If the expected return on a stock is 10 per cent. Risk free rate of…

A: We need to use CAPM equation to solve these problems. The equation is  Expected return =Risk free…

Q: Currently, the risk-free return is 3 percent, and the expected market rate of return is 9 percent.…

A: Given information: Risk free return is 3% Expected market rate of return is 9%

Q: A stock has a beta of 1.32 and an expected return of 12.8 percent. The risk-free rate is 3.6…

A: The slope of SML is Return of Market minus Rf. Note: Rf= Risk-free Rate SML= Security Market Line

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.