Risk premium and capital asset pricing model

Assignment Help Accounting Basics
Reference no: EM13115382

Suppose Intel stock has a beta of 2.16, whereas Boeing stock has a beta of 0.69. If the risk-free interest rate is 4% and the expected return of the market portfolio is 10%, what is the expected return of a portfolio that consists of 60% Intel stock and 40% Boeing stock, according to the CAPM?

Reference no: EM13115382

Questions Cloud

Information about project plan : An auto plant costs $100 million to build but can produce a new line of cars that will produce cash flows with a present value of $140 million if the line is successful. Illustrate the option to abandon in (b) using a decision tree.
How many chromosomes are there in a haploid set : How many pairs of homologous chromosomes does a red-striped laughing frog have in its somatic cells?
Financial management-wcmc ipo : Calculate the initial return earned by investors who are allocated shares in the IPO. What is the total cost ( underwriting fee and underpricing) of this issue to WCMC?
What mass of oxygen is required : If 12.0 g of O2 is required to inflate a balloon to a certain size at 27 OC what mass of O2 is required to inflate it to the same size (and pressure) at 5.0 oC.
Risk premium and capital asset pricing model : Suppose Intel stock has a beta of 2.16, whereas Boeing stock has a beta of 0.69. If the risk-free interest rate is 4% and the expected return of the market portfolio is 10%,
How many moles each of sodium ions in saline soln : A physiological saline solution contains 164 mEq/L each of Na+ and Cl-.How many moles each of Na+ and Cl- are in 0.500 L of the saline solution.
Computing population growth : Pick a country of your choice that is experiencing population growth.(I picked Mexico City,Mexico;18,131,000 in 2007, r is 1.7% expected to double in 40 years (0.69/0.017=40.6) pop. growth rate 1.142%(2008 est) find the most recent population coun..
Identify the element of period two : Identify the element of Period 2 which has the following successive ionization energies, in kJ/mol. IE1: 1314, IE2: 3389, IE3: 5298, IE4: 7471, IE5: 10992, IE6: 13329, IE7: 71345, IE8: 84087.
What is the elevation of lower point : A pre- engineering base line was run down a very steep hill.rather than measure horizontaily down hill with steel tape: surveyor measured the vertical angle with the theodolite and slope distance with 16m steel tape.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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