Revised estimate of the expected rate of return

Assignment Help Finance Basics

Reference no: EM13751761

Suppose that two factors have been identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 5%, and IR 3.0%. A stock with a beta of 2.6 on IP and 1.9 on IR currently is expected to provide a rate of return of 13%. If industrial production actually grows by 7%, while the inflation rate turns out to be 6.0%, what is your revised estimate of the expected rate of return on the stock?

Reference no: EM13751761

Questions Cloud

Cost efficiency can still be considered a major strategic : Cost efficiency can still be considered a major strategic objective of banks. Discuss.

Organize forum threads : Organize Forum Threads on page and apply settings to several or all threads. Threads are listed in a tabular format. The Threads can be sorted by clicking the column title or the caret at the top of each column.

Why us not on board with all of efforts of international law : Propose why the United States is not on board with all of the efforts, tribunals, courts, and declarations of international law. Give an example.

Write an essay on the current event of international law : Write an essay on the current event in recent history involving international law. Describe the event, the parties involved, and the issue in dispute.

Revised estimate of the expected rate of return : If industrial production actually grows by 7%, while the inflation rate turns out to be 6.0%, what is your revised estimate of the expected rate of return on the stock?

Write an essay reviewing the cold war era : Write an essay reviewing the Cold War era and the threats to American families. Include what you would do to protect your family in case of an attack.

Explain terms of risk factors : Why would someone want to buy Treasury Bills as opposed to investing in mortgage backed securities? Explain in terms of risk factors

Discuss economic policies you might advise : Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience.

Explain team development techniques : Write a 700- word paper in which you explain team development techniques. In your paper, complete the following:

User Account

All Pages