The expected market rate of return

Assignment Help Financial Management

Reference no: EM131022860

The risk-free rate is 3 percent. The expected market rate of return is 15 percent. You expect a stock with a beta of 1.3 to offer a rate of return of 12 percent. According to CAPM, what is the stock's alpha? The answer is -6.6. Please help me calculate this answer.?

Reference no: EM131022860

Questions Cloud

How frequently do dividend paying firms : How frequently do dividend-paying firms in the U.S. generally pay regular cash dividends?AnnuallySemiannuallyQuarterlyMonthlyBiannually

Ideas to discuss in exercise are why did revel go bankrupt : Please discuss Revel casino that was built in Atlantic City, New Jersey and then shortly thereafter became bankrupt. A Toronto based company purchased Revel for five cents on the dollar. The class discussion is centering on what exactly went wrong fo..

Examine the residual behavior attributable : Identify and discuss cultural and institutional factors which an analyst will have to consider before being able to isolate and examine the ‘residual' behavior attributable to a company's policies and characteristics.

How might schulz discussion of beliefs help us to understand : How might Schulz discussion of beliefs help us to understand Tan's "Mother Tongue?" Explore. What is a belief that you once held that you now question? Write for 15 minutes to each other.

The expected market rate of return : The risk-free rate is 3 percent. The expected market rate of return is 15 percent. You expect a stock with a beta of 1.3 to offer a rate of return of 12 percent. According to CAPM, what is the stock's alpha? The answer is -6.6. Please help me calcula..

Approaches to measuring conservatism : Two approaches to measuring conservatism are discussed in the chapter: the comparison of profit figures under different GAAPs; and asymmetric recognition of good and bad news. What are the advantages and disadvantages of each approach?

Write the equation for jacob demand curve : Suppose there are two consumers in a market, Jacob and Maria. You are told the following information about this market. Jacob demands 100 units of the product sold in this market when the price is $10 per unit. From the above information write the..

Overseeing the tax management-cost-financial accounting : The person generally directly responsible for overseeing the tax management, cost accounting, financial accounting, and information system functions is the: A. treasurer. B. director. C. controller. D. chairman of the board. E. chief executive office..

Areas of financial reporting : What are the major difficulties met by analysts when trying to compare companies' annual reports internationally? Which areas of financial reporting could be most usefully improved to aid such analysis?

User Account

All Pages