Estimate a capm regression of a total stock market

Assignment Help Finance Basics
Reference no: EM133110429

Suppose you estimate a CAPM regression of a total stock market index fund (average return of 12% annually before expenses) using net returns of the fund (i.e., fund returns after expenses the investor has to pay). The index fund has an annual expense of 0.5% per year.

What will be the alpha of this fund in the CAPM (on an annual basis)? Report your answer in percentage points rounded to the nearest tenth of a percentage point (e.g., 1.5). Also, when writing your answer, just write the number and do NOT add a "%" behind it (e.g., just write 1.5 and NOT 1.5%).

Reference no: EM133110429

Questions Cloud

Exchange-traded derivatives : Exchange-traded derivatives usually offer which of the following advantages (may be more than one correct answer) compared to over-the-counter derivatives?
What is the break-even point in sales revenue : What is the contribution margin ratio for Sports-Reps based on last year's data? What is the break-even point in sales revenue
Determining the average-risk projects : LaPango Inc. estimates that its average-risk projects have a WACC of 10%, its below-average risk projects have a WACC of 8%, and its above-average risk projects
Prepare net present value analysis of proposed long runway : First, a longer runway will require a new snowplow, which will cost $100,000. Prepare a net present value analysis of the proposed long runway
Estimate a capm regression of a total stock market : Suppose you estimate a CAPM regression of a total stock market index fund (average return of 12% annually before expenses) using net returns of the fund (i.e.,
What is monica investment behavior : Monica asked that we meet to see if I could help to reduce the differences between them. When the time came, she started the conversation by saying that Richard
Difference between one person corporation and partnership : What is the difference between One Person Corporation and Partnership? n your opinion, is a One Person Corporation better than the ordinary/regular Corporation
Find value of one right during the cum-rights period : A stock trades for $11 per share. It announces a rights offering with the following terms: 5 rights are required to purchase 1 share. The subscription price is
Calculate the cost or interest rate applied : a. Calculate the cost or interest rate applied if your company does not take the cash discount. Show all your calculations for full marks.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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