Beta and expected return, Stock Y has a beta of 1.3 and an

Beta and expected return

Assignment Help Financial Management

Reference no: EM131341540

Stock Y has a beta of 1.3 and an expected return of 13 percent. Stock Z has a beta of 0.75 and an expected return of 10.5 percent.

Required: If the risk-free rate is 4.5 percent and the market risk premium is 7 percent, are these stocks correctly priced?

Stock Y

Stock Z

The answer will be overvalued or undervalued.

Reference no: EM131341540

Questions Cloud

Post a description of your vision for social change : Post a description of your vision for social change. Include how your personal vision complements Walden University's vision and mission, as well as how Walden University might help you achieve your professional and academic goals

Specific population and demographic changes : Write a paper that examines specific population and demographic changes, along with shifts in the burden of disease, that have affected the delivery of health care services in Saudi Arabia.

What is the price per share of nogrowth stock : NoGrowth Corporation currently pays a dividend of $ 0.55 per? quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the? firm's equity cost of capital is 15.3 %??

Physician care services : In the Middleboro Physician Care Services, Inc. case, you are asked to examine the operations of an ambulatory, non-emergent care clinic which treats private and occupational health patients and provides services which do not include continuing o..

Beta and expected return : Stock Y has a beta of 1.3 and an expected return of 13 percent. Stock Z has a beta of 0.75 and an expected return of 10.5 percent. If the risk-free rate is 4.5 percent and the market risk premium is 7 percent, are these stocks correctly priced?

Perform a simulation of brownian motion of a pollen grain : Perform a simulation of Brownian motion of a pollen grain suspended in a liquid by generating a 3D random walk. Using documentation for your computational tool, investigate how to plot 3D graphics points and lines and create a 3D graphic of the wa..

Describing the issues facing ports in the future : 350 word min, Create a reflection post describing the issues facing ports in the future. Provide a summation of how you will use these lessons in the future.

How can diversity be a hindrance : Discuss a situation where it was difficult to interacting with a group due to the diversity of the group. How is diversity important? How can diversity be a hindrance

Develop a simulation to trace a path of a hiker : Develop a simulation to trace a path of a hiker, and run the simulation a number of times. Describe the results.

User Account

All Pages