What is the expected return for asset

Assignment Help Financial Management
Reference no: EM13723778

What is the expected return for asset X if it has a beta of 1.5, the expected market return is 15 percent, and the expected risk-free rate is 5 percent?

Reference no: EM13723778

Questions Cloud

What nominal annual interest rate will you be earning : You agree to make 24 deposits of $500 at the beginning of each month into a bank account. At the end of the 24th month, you will have $13,200 in your account. If the bank compounds interest monthly, what nominal annual interest rate will you be earni..
What are the common stockholders residual claims to earnings : Folic acid inc. has $20 million in earnings pays $2.75 million in interest to bondholders and $1.80 million in dividends to preferred stockholders. a) What are the common stockholders residual claims to earnings? b) What are the common stockholders l..
How could the course have better met your needs : You have used technology tools in this course to conduct research and produce work. How could the course have better met your needs
What is the portfolios beta : A 2-stock portfolio with a total value of $530,000. $195,000 is invested in Stock A with a beta of 1.25 and the remainder is invested in Stock B with a beta of 1.05. What is the portfolio's beta?
What is the expected return for asset : What is the expected return for asset X if it has a beta of 1.5, the expected market return is 15 percent, and the expected risk-free rate is 5 percent?
Expected annual return of portfolio : An investment advisor has recommended a $50,000 portfolio containing assets R, J, and K; $25,000 will be invested in asset R, with an expected annual return of 12 percent; $10,000 will be invested in asset J, with an expected annual return of 18 perc..
Standard deviation of the portfolio return : You have a 2-stock portfolio with a total value of $510,000. $195,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 19.90%, Stock B is 9.35%, and correlation between Stock A and Stock B is –0.60,..
Calculate the beta and then find the required return : Mikkelson Corporation's stock had a required return of 11.75% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free r..
Invested funds problem : Your uncle has $1,025,000 and wants to retire. He expects to live for another 25 years, and he also expects to earn 7.5% on his invested funds. How much could he withdraw at the beginning of each of the next 25 years and end up with zero in the accou..

Reviews

Write a Review

Financial Management Questions & Answers

  1you have invested 500 shares in maxwells company limited

1. you have invested 500 shares in maxwells company limited. for the next three years you will receive dividends of

  Should the firm undertake the healthy bottled water project

Cascade Water Company (CWC) currently has 30,000,000 shares of common stock out- standing that trade at a price of $42 per share. CWC also has 500,000 bonds outstanding that currently trade at $923.38 each. CWC has no preferred stock outstanding and ..

  Compute the gross profit margin ratio

Compute the gross profit margin ratio, the return on equity and the return on assets, rounding calculations to two decimal places and does the firm have positive or negative financial leverage? Briefly ex­plain.

  Explain rate of return if the market risk premium increased

What is the required rate of return if the market risk premium increased to 20% because of the increase in investors' risk aversion assuming that the return on the risk-free asset remains the same as in question 2 above.

  Explain the benefit of using flexible budgets

Prepare a flexible budget for 20,000, 22,500, and 25,000 units of activity and was Centron's experience in the quarter cited better or worse than anticipated? Prepare an appropriate performance report and explain your answer.

  Calculate the insurance premium

Calculate the insurance premium. Assume that the volatility of the index is 15% per annum and the dividend yields and the riskOfree interest rate when expressed as simple rates are approximately the same as the continuously compounded..

  Compute the market value of the bonds

Gillian Stationery Corporation needs to raise $600000 to improve its manufacturing plant. It has decided to issue a $1000 par value bond with an annual coupon rate of 8.0 percent with interest paid semi annually and a 10-year maturity. Investors requ..

  Justify and criticize the usual assumption made in

justify and criticize the usual assumption made in financial management literature that the objective of a company is

  Standard sinking fund method repayment at rate

Show that the borrower’s periodic outlay for a standard sinking fund method repayment at rate j is larger than the level outlay under amortization method with the interest rate i, if i > j

  Evaluate each franchise''s npv

According to the NPV, which franchise or franchises would be accepted if they are independent? Which could be accepted if they are mutually exclusive? Evaluate each franchise's NPV? Be sure to show your calculations.

  Summarize your findings from the articles in a two- to

summarize your findings from the articles in a two- to three-page paper excluding title and references pages. the paper

  Motivation-communication-teams-groups and team work

How could you use expectancy theory to increase your own motivational level? What kind of facial expression do you think might make a person appear intelligent? In what way is being a member of a virtual team much like being a telecommuter?

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