User Account

All Pages

Expected return based on the beta

Assignment Help Finance Basics
Reference no: EM133072208

You are analysing a share which has a beta of 1.21. The? risk-free rate is 3.2% and you estimate the market risk premium to be 7.5%. If you expect the share to have a return of 10.6% over the next? year, should you buy? it? Why or why? not? The expected return according to the CAPM is ()?%. ?(Round to two decimal? places.)

Should you buy the? share? ?(Select the best choice? below.)

A. Yes, because the expected return based on the beta is equal to or less than the return on the share.

B. No, because the expected return based on the beta is greater than the return on the share.

Reference no: EM133072208

Questions Cloud

Standard deviation of the portfolio with share : You have a portfolio with a standard deviation of 28% and an expected return of 19%. You are considering adding one of the two shares in the table below.
What are the cash receipts for March : ABC Company has sales forecasts of the following: January = $40,000; February = $65,000; March = $52,850. What are the cash receipts for March
What is the new value of the? portfolio : You are considering how to invest part of your retirement savings.You have decided to put $500 000 into three? shares: 56% of the money in Minerva?
What is the desired inventory : ABC Company desires ending inventory equal to 20% of the next month's sales. What is the desired inventory
Expected return based on the beta : You are analysing a share which has a beta of 1.21. The? risk-free rate is 3.2% and you estimate the market risk premium to be 7.5%. If you expect the share to
Record the Adjusting Entry for A and B : Record the Adjusting Entry for A and B - Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $380,000
Determining the current interest rate : The current interest rate is 5% and CPI is 2%. How much does he need to have in his find to provide for his retirement?
Prepare journal entries to record merchandising transactions : Prepare journal entries to record the following merchandising transactions of Cabela's, which uses the perpetual inventory system and the gross method
What is the realised rate of return : An investor purchases a 3 year, 5% annual coupon bond at $96.804218 per $100 of par value and sells it 1 year later.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd