According to the capm capital asset pricing model

Assignment Help Finance Basics
Reference no: EM131013716

According to the CAPM (capital asset pricing model), the security market line is a straight line. The intercept of this line should be equal to

a. zero

b. the expected risk premium on the market portfolio

c. the risk-free rate

d. the expected return on the market portfolio

 

Reference no: EM131013716

Questions Cloud

Difference between return and yield-to-maturity of a bond : Explain the difference between return and yield-to-maturity of a bond. Please be precise and give examples if necessary.
What''s the stock''s capm beta : 13%, and the risk-free rate is 5%, what's the stock's CAPM beta?
How these strengths are expressed in your daily life : What were your five highest strengths? Describe how these strengths are expressed in your daily life. Are there any you do not exercise regularly
What is bayes decision rule and bayes classification error : What is the Bayes decision rule and the Bayes classification error - Repeat with two training samples from each category and a single test point in order to find
According to the capm capital asset pricing model : According to the CAPM (capital asset pricing model), the security market line is a straight line. The intercept of this line should be equal
What are the arguments for and against an index fund : What are the arguments for and against an index fund? Are these arguments stronger or weaker for funds investing in large-cap U.S. stocks, small-cap U.S. stocks, and foreign stocks? Please go straight to the point
What is its expected return : The risk-free rate is 5% and the expected return on the market portfolio is 13%. A stock has a beta of 1.5, what is its expected return?
Variable rate mortgage with an initial interest rate : During February 2016, John Smith financed the purchase of his new home by borrowing $250,000 from the Bank of America (BA). Although he was offered a conventional 30-year loan at a fixed rate of 5.4 percent, Mr. Smith chose BA's “5/30” variable rate ..
Find the equation of the plane which is tangent to the graph : Find the equation of the plane which is tangent to the graph of f(x, y) = 4 arctan (xy) at the point (x, y) = (1, 1). Find the equation of the tangent plane to x + y + z = exyz at the point (0, 0, 1).

Reviews

Write a Review

Finance Basics Questions & Answers

  If quick towing is in 34 percent marginal tax bracket find

suppose the quick towing company purchases a new tow truck. the old truck had a book value of 1000 and was sold for

  Suppose you are valuing a future stream of high-risk

suppose you are valuing a future stream of high-risk high-beta cash outflows. high risk means a high discount rate. but

  Explain the rationale behind choosing the pricing approach

Describe the strategic implications that would need to be considered in setting a price for that product, use a cost-based pricing approach to setting the product price. Explain the rationale behind choosing the pricing approach.

  Describe what is reported on asset side of a cash flow

Describe what would be reported on the asset side of a cash flow based balance sheet versus the asset side of an accrual accounting balance sheet.

  What is the relationship between a bonds market price and

what is the relationship between a bonds market price and its promised yield to maturity?

  A firm issues a bond at par value shortly thereafter

a firm issues a bond at par value. shortly thereafter interest rates fall. if you calculated the coupon rate coupon

  The weaver watch company sells watches for 25 the fixed

the weaver watch company sells watches for 25 the fixed costsare 140000 and variable costs are 15 per watch.a. what is

  What is the bank cost of preferred stock

Holdup Bank has an issue of preferred stock with a $4.25 stated dividend that just sold for $92 per share.What is the bank's cost of preferred stock?

  The hedge may reduce reported earnings prior

Which of the following types of contracts are generally excluded from SFAS 133 accounting rules (including fair market value adjustment rules)?

  Sarahs comprehensive major medical health insurance plan at

sarahs comprehensive major medical health insurance plan at work has a deductible of 750. the policy pays 85 percent of

  Analyze the benefits of establishing solid financial acumen

Analyze the benefits of establishing solid financial acumen in a company. Describe personal experiences in one or two situations in which financial acumen was either not supported as an organization hallmark or was actually built into the compa..

  Calculate the debt ratio for maple company calculate the

maple companys balance sheet shows total liabilities of 32800300 total stockholders equity of 10350000 and total assets

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd