Stock R has a beta of 2.0, Stock S has a beta of 0.35, the required return on an average stock is 9%, and the risk-free rate of return is 3%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places. %
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A: Given: Expected return = 14.3% Risk free rate = 3.9% Market risk premium = 7.8%
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A: The Capital Asset Pricing Model (CAPM) is a model that describes the relationship between the…
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A: Formula: Required return=Risk free rate+Beta×Risk premium
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A: Risk free rate = 7.5% Market return = 11% Beta = 2
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A: We require to calculate the expected return on the market in this question using following details:…
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A: Expected Rate of return on average stock = Risk free Rate + beta * Market risk premium 9% = 7% + 1 *…
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A: Required rate of return is defined as the minimum return regarding an investor, which is used to…
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A: Calculation of difference between riskier stock and less risky stock: Answer: The difference between…
Q: Assume that the risk-free rate is 7.5% and the market risk premium is 5%. What is the required…
A: We need to use CAPM equation to calculate required rate of return. The equation is rs =Rf+beta…
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A: In order to calculate the stock's beta, we can use the the formula given under capital asset pricing…
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A: Given: Beta = 1.19 Expected return = 11.27% Risk free rate = 3.4%
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A: given, beta = 1.22 expected market return ( rm) = 12% risk free rate ( rf) = 4%
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A: In this we have to use capital assets pricing formula for calculation of expected return.
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A: In the given question we require to calculate the expected return on stock: According to Capital…
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A: Beta less than 1 signifies less systematic risk.
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A: Given: Beta =0.8Expected return =10.6% Risk free rate =2.7%
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A: a) As per CAPM, required rate of return = risk free rate + (beta * market risk premium)
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A: CAPM is an investment theory that establishes the relationship between the expected return and the…
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A: Given that the expected return on the market is 12%, risk free rate is 3.6% and the beta is 1.10, we…
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A: The required rate of return can be ascertained by using the Capital Asset Pricing Model (CAPM). The…
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A: CAPM describes the relationship between systematic risk and expected return for assets, particularly…
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A: The risk premium is the difference between the expected market rate and the risk-free rate. It is…
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A: We require to compute the expected market return (Rm) from following details : Expected return on…
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A: Capital Asset Pricing Model (CAPM) is a fundamental portfolio and security selection model , to find…
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A: Expected return = Risk free rate+Beta*(Market return-Risk free rate) Where Risk free rate = 4.75%…
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A: Following details are given in the question : Beta of stock = 1.38 Expected return on the market =…
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A: A risk-free rate of return is the return that an investor earns by investing in securities that have…
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A: The beta of the stock can be calculated as per CAPM
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A: Information Provided: Expected Return = 15.6% Risk-free rate = 6.2% Market Risk Premium = 7.7%
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A: Risk-free return = 4.5% Market risk premium = 8% a) Beta = 1.2 b) Beta = 1.08 CAPM formula: Expected…
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A:
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A: According to CAPM model: rstock=rf+βstock×rm-rf where, rf=risk free return rm = market return…
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A: Given Beta of Stock A = 1.30 Risk free Rate = 4.75% Required return of stock A = 13.25%
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A: Given, beta(stock R)=1.5 beta(stock S)=0.85 Average stock=9% Rate of return=3%
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A: Following details are given in the question : Beta of stock = 0.81 Expected return on the market =…
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A: Given, Beta =1.2 Expected Market Return = 9% Risk Free rate = 1.5% Formula to be used : CAPM…
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A: Beta is one of the measure of volatility or risk of the stock. More beta means more risk and less…
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- An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 3.2%, and the return on the HML portfolio (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = 20.4, and di = 1.3, what is the stock’s predicted return?You have observed the following returns over time: Assume that the risk-free rate is 6% and the market risk premium is 5%. What are the betas of Stocks X and Y? What are the required rates of return on Stocks X and Y? What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y?Stock R has a beta of 1.5, Stock S has a beta of 0.85, the required return on an average stock is 9%, and the risk-free rate of return is 3%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places.
- Stock R has a beta of 1.5, Stock S has a beta of 0.85, the required return on an average stock is 9%, and the risk- free rate of return is 5%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places. %Required Rate of Return Stock R has a beta of 1.8, Stock S has a beta of 0.35, the expected rate of return on an average stock is 12%, and the risk-free rate is 7%. By how much does the required return on the riskier stock exceed that on the less risky stock? Do not round intermediate calculations. Round your answer to two decimal places.Stock X has a beta of 2.5, Stock B has a beta of 0.65, the required return on an average stock is 13%, and the risk-free rate of return is 5%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places.
- Assume the expected return on the market is 9 percent and the risk-free rate is 4 percent. What is the expected return for a stock with a beta equal to 1.80? (Round answers to 2 decimal places, e.g. 15.25.) What is the market risk premium? (Round answers to 2 decimal places, e.g. 15.25.)Stock R has a beta of 1.4, Stock S has a beta of 0.95, the expected rate of return on an average stock is 10%, and the risk-free rate is 7%. By how much does the required return on the riskier stock exceed that on the less risky stock? Do not round intermediate calculations. Round your answer to two decimal places.Assume the expected return on the market is 14 percent and the risk-free rate is 4 percent. What is the expected return for a stock with a beta equal to 1.00? (Round answers to 2 decimal places, e.g. 15.25.) Expected return What is the market risk premium? (Round answers to 2 decimal places, e.g. 15.25.) Market risk premium
- The risk-free rate is 3% and the market risk premium is 9%. If stock A has a beta of -0.9, what is the stock's required rate of return? answer format: show your answer in percent (without the % sign) and to 1 decimal place. For example, 12.56 should be shown as 12.6A stock has an expected return (rs) of 10.4%, the risk-free rate (TRF) is 1.7%, and market risk premium (M-TRF) is 8.3%. What is this stock's Beta? Enter your answer as a number with two decimal places of precision (i.e. 1.23)Give typing answer with explanation and conclusion the expected return on stock A is 11.35%. the expected return on stock B is 8.7%. assuming CAPM holds, if the beta of stock A is higher than the beta of stock B by 0.17, what should the risk premium be?