Your broker has developed a list of firms, their betas, and the return he expects the stock to yieldover the next twelve months (labeled "Expected Return"). You have estimated that the risk-freerate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, which stockshould you purchase?Expected Return10.5%Delta Vanlines 1.25 13.0 %1.60 16.0%FirmBetaAnderson, Inc. 0.90Nathan'sBakeriesZ-manElectronicsO Delta Vanlines1.90 19.0%All of the stocks,Anderson, Inc.O Nathan's BakeriesOZ-man Electronics

Capital Asset Pricing Model (CAPM) is an alternative model to find out the cost of equity or the…

Your broker has developed a list of firms, their betas, and the return he expects the st over the next twelve months (labeled "Expected Return"). You have estimated that the rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, w should you purchase? Firm Anderson, Inc. Delta Vanlines Nathan's Bakeries Z-man Electronics Beta Expected Return 0.90 10.5% 1.25 13.0 % 1.60 16.0% 1.90 19.0%

Your broker has developed a list of firms, their betas, and the return he expects the st over the next twelve months (labeled "Expected Return"). You have estimated that the rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, w should you purchase? Firm Anderson, Inc. Delta Vanlines Nathan's Bakeries Z-man Electronics Beta Expected Return 0.90 10.5% 1.25 13.0 % 1.60 16.0% 1.90 19.0%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 7P

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Your broker has developed a list of firms, their betas, and the return he expects the stock to yield over the next twelve months (labeled "Expected Return"). You have estimated that the risk-free rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, which stock should you purchase? Firm Beta Expected Return Anderson, Inc. 0.90 10.5% Delta Vanlines 1.25 13.0% Nathan's 1.60 16.0% Bakeries Z-man 1.90 19.0% Electronics O All of the stocks O Z-man Electronics O Nathan's Bakeries O Delta Vanlines O Anderson, Inc.
Your broker has developed a list of firms, their betas, and the return he expects the stock to yield over the next twelve months (labeled "Expected Return"). You have estimated that the risk-free rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, which stock should you purchase? Firm Beta Expected Return Anderson, Inc. 0.90 10.5% Delta Vanlines 1.10 13.0% Nathan's Bakeries 1.60 16.0% Z-man Electronics 2.15 19.0%
Your broker has developed a list of firms, their betas, and the return he expects the stock to yield over the next twelve months (labeled "Expected Return"). You have estimated that the risk-free rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, which stock should you purchase? Firm Beta Anderson, Inc. 0.90 10.5% Delta Vanlines 1.25 13.0% 1.60 16.0% Nathan's Bakeries Z-man Electronics Nathan's Bakeries Anderson, Inc. 1.90 19.0% Z-man Electronics All of the stocks Delta Vanlines Expected Return
n Question 3 Your broker has developed a list of firms, their betas, and the return he expects the stock to yield over the next twelve months (labeled "Expected Return"). You have estimated that the risk-free rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, which stock should you purchase? Firm Beta Anderson, Inc. 0.90 Delta Vanlines 1.25 13.0% 1.60 16.0% Nathan's Bakeries Z-man Electronics O Z-man Electronics O Anderson, Inc. 1.90 19.0% O All of the stocks Expected Return 10.5% O Nathan's Bakeries O Delta Vanlines
Your broker has developed a list of firms, their betas, and the return he expects the stock to yield over the next twelve months (labeled "Expected Return"). You have estimated that the risk-free rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, which stock should you purchase? Anderson, Inc. Nathan's Bakeries Z-man Electronics Delta Vanlines All of the stocks Beta Expected Return Anderson, Inc. 0.90 10.5% Delta Vanlines 1.10 13.0% 1.60 16.0% Firm Nathan's Bakeries Z-man Electronics 2.15 19.0%
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