You own a bond that has a par value of $1,000 and matures in 5 years. It pays a 5 percent annual coupon rate. The bond currently sells for $1,100. What is the bond's expected rate of return?

Supposing the return from an investment has the following probability distribution   Return   Probability     R (%)   8                 0.2   10               0.2   12               0.5   14               0.1   Required: What is the expected return of the investment? What is the risk as measured by the standard deviation of  expected returns?

H Consider the three stocks in the following table. Pe represents price at time t, and Qe represents shares outstanding at time t Stock C splits two-for-one in the last period. Pe 81 41 82 lo 100 200 200 Rate of return P₁ 86 36 92 li 100 200 200 % P₂ 86 36 46 Required: Calculate the first-period rates of return on the following indexes of the three stocks: (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. A market value-weighted index 2₂ 100 200 400

Describe the advantages of using CAPM model to determine the expected return.