Calculate the market risk premium and the expected rate

Assignment Help Financial Management

Reference no: EM131995170

Stock A has a beta of .5, and investors expect it to return 6%. Stock B has a beta of 1.5, and investors expect it to return 12%.

Use the CAPM to calculate the market risk premium and the expected rate of return on the market.

(Do not round intermediate calculations. Enter your answers as a whole percent.)

Reference no: EM131995170

Questions Cloud

Pros and cons of international food relief programs : Some people argue that such food programs, which may have short-term benefits, actually increase the threat of starvation in the future

Compute the risk-free and the expected return on the market : Stock A has a beta of 1.75 and an expected return of 15%. Stock B has a beta of 2.78 and an expected return of 23%.

What might future archaeologists infer about your behavior : What might future archaeologists infer about your behavior based on the items that might be left after many years?

Find the terminal step values for the put values : A stock is currently priced at $40, with a continuously compounded rate of return of mu = 15%, and a volatility of sigma = 40%.

Calculate the market risk premium and the expected rate : Stock A has a beta of .5, and investors expect it to return 6%. Stock B has a beta of 1.5, and investors expect it to return 12%.

Record the phenotypes and the phenotype ratio : Record the phenotypes and the phenotype ratio in lowest terms.

Determine what should be the level dividend amount : A stock has current price 50. Annual force of interest rate is .04. If expiration time for a forward contract is half a year, and its forward price is 50.30.

Debate on topic - EDUCATION KILLS CREATIVITY : This is debate assignment. Topic for debate is EDUCATION KILLS CREATIVITY. Build students' abilities to structure arguments based on evidence

What is the value of a 6-month put option with a strike : Use the binomial method to answer (a) and (b). What is the value of a 6-month put option with a strike price of 42?

User Account

All Pages