What is the beta of bmw relative to dax stock market index

Assignment Help Financial Accounting
Reference no: EM13871479

The correlation between returns to BMW stock on the Deutsche Bo¨ rse and the German DAX stock market index is 0.44 when all returns are calculated in euros. The standard deviations of monthly returns to BMW stock and the DAX are 10.5 percent and 4.6 percent, respectively.

a. What is the beta of BMW relative to the DAX stock market index?

b. If the euro risk-free rate is 5 percent and the DAX market risk premium is 6 percent, what is the required return on BMW stock when measured against the DAX stock market index?

c. The correlation between the DAX and world stock market indices is 0.494. The standard deviations of monthly returns to the DAX and world indices are 4.13 percent and 5.26 percent, respectively. What is the beta of the DAX stock market index relative to the world stock market index?

Reference no: EM13871479

Questions Cloud

Consider the following hypothesis test : Consider the following hypothesis test. H0: μ ≤40 H1: μ >40
Difference between the freelance and business models : Describe in detail and explain the difference between the freelance and business models
Hypothesis about the population mean : The random sample below is obtained to test the following hypothesis about the population mean. H0: μ ≥1500 H1: μ
Recognizing the unique ways children develop and learn : Summarize your thinking about children's ability to learn and the relationship between learning and development. Describe what you believe is the role adults play in fostering development and learning. As a lifelong learner, identify any questions ab..
What is the beta of bmw relative to dax stock market index : What is the beta of BMW relative to the DAX stock market index? If the euro risk-free rate is 5 percent and the DAX market risk premium is 6 percent, what is the required return on BMW stock when measured against the DAX stock market index?
What are the limits of the act : What are the limits of the Act? As an advanced practice nurse, what policy changes would you recommend to provide health coverage to those who remain uninsured? What effects does this act have on providers and consumers
Discuss the theory of organizational learning : discuss the theory of organizational learning
Kinds of information that should be reported in the statisti : Briefly describe the kinds of information that should be reported in the statistical section of the CAFR.
Calculate equity required return under risk-free rate : Calculate equity required return under each of the following, assuming the CAPM holds The risk-free rate is 8 percent, beta is 1.5, and the market risk premium is 8.5 percent.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Decision on proposal where contract price

Decision on proposal where contract price is lesser than variable cost - What in house costs should be used to compare with the proposal received from the contractor?

  Why to use the allowance method for bad debt

Sold six 1000 watt microwaves and four 1200 watt microwaves on account to Briana Co., invoice 891, terms 2/10, n/30, FOB shipping point.

  Calculate the labor rate variance the labor efficiency

Calculate the labor rate variance, the labor efficiency variance, and the total direct labor cost variance for October and for November. Interpret the October direct labor variances.

  Compare and contrast accounting practices

Analyze reporting requirements for private sector, not-for-profit organizations under Financial Accounting Standard Board guidance. Compare and contrast accounting practices between the two different assignments.

  How much would profits increase

Assume that there are 2,000 hours available on the cutting machine and that the demand for each product is 15,000 units. If one more hour of machine time could be obtained, how much would profits increase?

  Calculate prime and conversion costs for the month prime

calculate the prime and conversion costs for the month Prime?

  How much should the owner of machine charge per hour

A track dozer cost $165,000 to purchase. Fuel, oil, grease, and minor maintenance are estimated to cost $35.00 per operating hour. A major engine repair costing more than $26,000 will probably be required after 7,200 hrs of use. How much should the o..

  Paney company makes calendars information on cost per unit

paney company makes calendars. information on cost per unit is as followsfixed marketing expense totaled 13000 and

  Equivalent units related to conversion costs

Arizaga Corporation manufactures canoes in two departments, Fabrication and Waterproofing. In the Fabrication Department, fiberglass panels are attached to a canoe- shaped aluminum frame. What are the Fabrication Department's equivalent units related..

  Explain is what zero-based budgeting

Explain what zero-based budgeting is and how it can improve the efficiency of the organization?

  What are the ethical considerations that kravetz faces

What are the ethical considerations that Kravetz faces in answering the auditors question? How should she respond to the question.

  Prepare required journal entries for 2014 and 2015

Prepare required journal entries for 2014 and 2015. Be sure to indicate whether each entry should be made to an unrestricted or temporarily restricted fund and

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