The estimated factor sensitivities of Alpha PLC to Fama-French factors and the risk premia associated with those factors are given in the table below:   Factor Sensitivity Risk Premium (%) Market factor 1.20 4.5% Size factor -0.50 2.7% Value factor -0.15 4.3%   Required: 1.Based on the Fama-French model, calculate the required return for Alpha PLC using these estimates. Assume that the Treasury bill rate is 4.7 percent.    2. Describe the expected style characteristics of Alpha PLC based on its factor sensitivities

Assume that the short-term risk-free rate is 6%, the market index S&P500 is expected to pay returns of 30% with the standard deviation equal to 40%. Asset A pays on average 10%, has a standard deviation equal to 40% and is NOT correlated with the S&P500. Asset B pays on average 16%, also has a standard deviation equal to 40% and has a correlation of 1 with the S&P500. Determine whether asset A and B are overvalued or undervalued, and explain why.  (Beta of asset i (?i) = ?i ?iM / ?M, where ?i, ?M are standard deviations of asset i and market portfolio, ?iM is the correlation between asset i and the market portfolio)

Based on the information in the yellow shaded areas: a) Plot the Security Market Line (SML) b) Superimpose the CAPM’s required return on the SML c) Indicate which investments will plot on, above and below the SML?

Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the required return. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Risk-free rate, RF 1% The required return for the asset is %. (Round to two decimal places.) C Market return, m 5% Beta, b 0.5

Required Return If the risk-free rate is 11.8 percent and the market risk premium is 7.6 percent, what is the required return for the market?

Use the basic equation for the CAPM to rework each of the following problems for above case. Case A) Find the required return for an asset with a beta of 0.9 when the risk-free rate and market return are 8% and 12% respectively. Case B) Find the risk-free rate for a firm with a required return of 15% and a beta of 1.25 when the market return is 14%. Case C) Find the market return for an asset with a required return of 16% and a beta of 1.1 when the risk-free rate is 9%. Case D) Find the beta for an asset with a required return of 15% when the risk-free rate and market return are 10% and 12.5% respectively.

(Capital Asset Pricing Model) CSB, Inc. has a beta of 0.758. If the expected market return is 10.5 percent and the risk-free rate is 6.5 percent, what is the appropriate expected return of CSB (using the CAPM)? The appropriate expected return of CSB is%. (Round to two decimal places.)

In the Fama-French 3-factor model, suppose the factor risk premiums (in % year) are as follows: Factor Risk Premium Factor Market Risk- free rate Beta for the Portfolio 5.0% Market Risk- free rate SMB The estimated factor betas for a portfolio of large agriculture companies are: 1.1 3.0% SMB HML -0.7 7.0% HML 0.9 According to this 3-factor model, what is the expected excess return for this portfolio of agriculture companies? When performing the calculations, do not round any inputs or interim results until you get the final answer. Round your final answer to four places after the decimal point.

Manipulating CAPM Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems. a. Find the required return for an asset with a beta of 1.48 when the risk-free rate and market return are 8% and 13%, respectively. b. Find the risk-free rate for a firm with a required return of 14.684% and a beta of 1.47 when the market return is 12%. c. Find the market return for an asset with a required return of 12.040% and a beta of 0.95 when the risk-free rate is 5%. d. Find the beta for an asset with a required return of 13.312% when the risk-free rate and market return are 10% and 12.3%, respectively. C a. The required return for an asset with a beta of 1.48 when the risk-free rate and market return are 8% and 13%, respectively, is %. (Round to two decimal places.)

Please help with this question with full working out.