Calculate return for it using capital asset pricing model

Assignment Help Financial Management

Reference no: EM131445253

Using a stock of your choice calculate the return for it using the Capital asset pricing model. Assume an annualized return for the market at 6.86% and a risk free rare of 3.45%. Analyze and elaborate on your results against the last three years average return of your chosen stock.

Reference no: EM131445253

Questions Cloud

The margin percentage in your account falls : Suppose you purchase 100 shares of a stock on January 1st for $50/share with $3000 of your own money and $2000 borrowed from your broker at 6%. The stock doesn’t pay dividends. The broker requires a maintenance margin percentage of 35%. If the stock ..

About the expected returns : Expected returns: You have chosen biology as your college major because you would like to be a medical doctor. However, you find that the probability of being accepted to medical school is about 10 percent. Without considering the additional years yo..

Calculate the yield using a geometric average : One-year Treasury securities yield 2.9%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 5.85%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield..

What is the yield on two-year treasury securities : The real risk-free rate is 2.25%. Inflation is expected to be 1.5% this year and 4.25% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities?

Calculate return for it using capital asset pricing model : Using a stock of your choice calculate the return for it using the Capital asset pricing model. Assume an annualized return for the market at 6.86% and a risk free rare of 3.45%. Analyze and elaborate on your results against the last three years aver..

Expected return and standard deviation of a portfolio : Suppose that a fund that tracks the S&P has mean E(RM) = 16% and standard deviation sigmam = 10%, and suppose that the T-bill rate Rf = 8%. Answer the following questions about efficient portfolios: What is the expected return and standard deviation ..

How long will it take him to accumulate : Thomas Nguyen currently has $9, 300 in the bank earning interest of 7 percent per year, compounded monthly. If he needs $24, 100 to purchase a car and can save an additional $100 a month stating at the end of this month, how long will it take him to ..

What is the yield on a seven-year treasury note : The real risk-free rate is 2%. Inflation is expected to be 3.3% this year, 4.25% next year, and 3.25% thereafter. The maturity risk premium is estimated to be 0.05(t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury..

What is its default risk premium : The real risk-free rate, r*, is 2.3%. Inflation is expected to average 2.2% a year for the next 4 years, after which time inflation is expected to average 4.5% a year. Assume that there is no maturity risk premium. An 8-year corporate bond has a yiel..

User Account

All Pages