Discuss five assumptions of the capital asset pricing model

Assignment Help Financial Management

Reference no: EM132034702

In capital markets,profits,gain,interest,dividends are the expected return sin exchange for risk assumed by the investor.

a) Discuss the concept of risk and return with respect to investment

b) Compute the expected return on a security with a beta of 1.4, risk free rate of 12%, and market rate of return of 19%.

c) Given a dividend growth rate of 5%, current dividend of GHS8 and beginning price of investment of GHS40.00, what will be the rate of return on the investment using the Gordons model?

d) Discuss five assumptions of the Capital Asset Pricing Model.

Reference no: EM132034702

Questions Cloud

What is the final pressure in atmosphere : Assuming no change in volume of the ball, what is the final pressure in atmosphere?

What is the full selling price of a globe : Management estimates that the variable cost of the globe will be $62 per unit, Assuming sales of 1,200 units, what is the full selling price of a globe

What is social entrepreneurship : What fuels social and cultural entrepreneurship in our particular cultural, historical, economic, technological, etc., moment?

What should you expect to be earning : You currently earn $900 per month, but you are expecting your earnings to rise 20% per year. In five years, what should you expect to be earning?

Discuss five assumptions of the capital asset pricing model : Discuss the concept of risk and return with respect to investment. Discuss five assumptions of the Capital Asset Pricing Model.

Provide a calculation of jack taxable income : Jack, a single individual with a salary of $100,000, Casualty loss after $100 floor $1,000. Provide a calculation of Jack's 2014 taxable income

What is the final temperature : When 116.0 mL of water at 26.0°C is mixed with 71.0 mL of water at 85.0°C, what is the final temperature?

How do you find which compounds are electrolytes : How do you find which compounds are electrolytes, nonelectrolytes, strong electrolytes, weak electrolytes?

Why is the study of sociology important : Why is the study of sociology important? Do you see any connections between changing social norms and the larger, global issues that face us today?

User Account

All Pages