Find the market return for an asset

Reference no: EM1344511

Manipulating CAPM Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems.

a. Find the required return for an asset with a beta of 0.90 when the risk-free rate and market return are 8% and 12%, respectively.

b. Find the risk-free rate for a firm with a required return of 15% and a beta of 1.25 when the market return is 14%.

c. Find the market return for an asset with a required return of 16% and a beta of 1.10 when the risk-free rate is 9%.

d. Find the beta for an asset with a required return of 15% when the risk-free rate and market return are 10% and 12.5%, respectively.

Reference no: EM1344511

Questions Cloud

Elucidate why an increase in one firm output tends : Elucidate why an increase in one firm's output tends to deter production by the other.

What is the rotational kinetic energy : Two charged spheres are 15 cm apart. They are moved, and the force on each of them is found to have been quadrupled. How far apart are they now.

Process of modeling using entity-relationship diagrams : Process of starting with world objects and modeling by using entity-relationship diagrams is referred to as top-down process.

Arantxa corporation-equity securities journal entries : Make the journal entries to record the above three securities purchases. Make the journal entry for the security sale on May 20. Compute the unrealized gains or losses and prepare the adjusting entry for Arantxa on December 31, 2008.

Find the market return for an asset : Find the market return for an asset with a required return of 16% and a beta of 1.10 when the risk-free rate is 9% and find the beta for an asset with a required return of 15 percent.

Which is the coordinate that is equivalent to latitude : A styrofoam box used to keep drinks cold at picnic has total wall area(including the lid) of 0.80m2 and wall thickness 2 cm. it is filled with ice, water and cans at 0 Celsius. What is the rate of heat flow into the box if temperature of the outsi..

Find the net community profit : A hospital incurs 10 million dollar of cost to treat Medicaid patients and receives $7 million in payment. Actual charges for these Medicaid patients were 20 million dollar.

Illustrate what is the forecasted price of oil over the next : Illustrate what is the forecasted price of oil over the next 16 years using a discount rate of 5%.

Find the x component of the force vector : The block is acted upon by its weight w=200lb, a horizontal force Q=600 lb and pressure P exerted by the inclined plane. The resultant R of these forces is up and parallel to the incline there by sliding the block up it. Establish P and R.

User Account

All Pages