Expected rate of return on the market

Assignment Help Financial Management
Reference no: EM131054594

A stock has an expected return of 7%. What is its beta? Assume the risk-free rate is 4% and the expected rate of return on the market is 12%. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

Reference no: EM131054594

Questions Cloud

Attribute of futures contract : The fact that superior returns can not be made by selling stocks that cut dividends is evidence of: A long-short investment strategy is used in the case where the target is being tracked vastly differs from a diversified market portfolio. In such a s..
The expected rate of return on the market : A share of stock is now selling for $120. It will pay a dividend of $10 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 6% and the expected rate of r..
What was arithmetic average return on crash-n-burn stock : You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 18 percent, –3 percent, 16 percent, 11 percent, and 10 percent. What was the arithmetic average return on Crash-n-Burn’s stock over this five-year period..
What is the value of this annuity five years from now : A 7-yr annuity of fourteeen $10,600 semi-annual payments will begin 9 years from now, with the first payment coming 9.5 years from now. If the discount rate is 9 percent compounded monthly, what is the value of this annuity five years from now? If th..
Expected rate of return on the market : A stock has an expected return of 7%. What is its beta? Assume the risk-free rate is 4% and the expected rate of return on the market is 12%.
Compute expected return and standard deviation of return : Compute the expected return and the standard deviation of return for 4 portfolios with different weights w on asset A (and therefore weight 1-w on B): w= -0.5, w=0.3, w=0.8, w=1.3. Then sketch a porfolio frontier with the 4 portfolios, asset A and as..
Mutual fund at the beginning of the year : You invested $70,000 in a mutual fund at the beginning of the year when the NAV was $38.21. At the end of the year the fund paid $.36 in short-term distributions and $.53 in long-term distributions. If the NAV of the fund at the end of the year was $..
The market price of a security : The market price of a security is $70. Its expected rate of return is 12%. The risk-free rate is 7%, and the market risk premium is 7%. What will the market price of the security be if its beta doubles (and all other variables remain unchanged)? Assu..
The growth rate of industrial production-inflation rate : Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 6% and IR 5%. A stock with a beta of 1 on IP and 0.4 on IR currently is expected to provide a rate..

Reviews

Write a Review

Financial Management Questions & Answers

  What amount does the required investment decline

How much must be invested today in order to generate a five year annuity of $1,000 (part A)? and (part B) by what amount does the required investment decline if the first payment of the five year annuity of $1,000 occurs two years from today, and the..

  Interest on the sinking fund is compounded annually

A company agrees to repay a loan over five years. Interest payments are made annually and a sinking fund is built up with five equal annual payments made at the end of the year. Interest on the sinking fund is compounded annually.

  tax rate-Computer-based order entry system

Your firm is contemplating the purchase of a new $660,000 computer-based order entry system. The system will be depreciated straight-line to zero over its six-year life. It will be worth $51,000 at the end of that time.

  The semi-annual coupon payments for this bond

Apps store, Inc is offering a 7 year bond with a 1000 par value. The selling price is 95% of the par value and the bond offers a yield to maturity of 10%. This bond offers semi-annual coupon payments? What is the dollar amount $ of the semi-annual co..

  Discuss the leverage and transparency risks

Hedge Funds’ Investments have five incremental risks that are more pronounced than in many other investment funds. Please discuss the Leverage and Transparency risks. Give examples.

  Currently has negative earnings-benchmark price-sales ratio

TwitterMe, Inc., is a new company and currently has negative earnings. The company’s sales are $2,200,000 and there are 155,000 shares outstanding. If the benchmark price-sales ratio for the company is 4.6, how much will you pay for the stock? If the..

  What is the value of this annuity five years from now

A 4-year annuity of eight $9,800 semi annual payments will begin 9 years from now, with the first payment coming 9.5 years from now. If the discount rate is 7 percent compounded monthly, what is the value of this annuity five years from now?

  Explain a trend assesment of the company financial statement

Want to compare my stats with a financial professional. Draft a trend assesment of the company financial statements. (My company is Amgen, the biopharmaceutical company).

  Semi annual bonds outstanding-what is the yield to maturity

Signature Sweets, Inc. has 10 percent semi annual bonds outstanding with 20 years to maturity. The latest quote on these bonds is 120.00 percent of the face value. What is the yield to maturity?

  Calculate the cost of capital for a company

You have been asked to calculate the cost of capital for a company with the following information. The company has $7,500,000 in face value bonds, trading at 96.5% of face value. The YTM on these bonds is 5.75%. Given this information, what is the es..

  Within the discussion board area write 400ndash600 words

within the discussion board area write 400ndash600 words that respond to the following questions with your thoughts

  Similar investment managers overcomes statistical problems

Determine whether or not the universe of similar investment managers overcomes the statistical problems associated with instability of beta or total variability. Support your position.

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