What is the expected return of this stock

Assignment Help Financial Accounting
Reference no: EM132966224

Question - Suppose that the expected return on the market is 10% and the risk-free rate is 3%. The correlation of a company's stock with the market is 0.75. The variance of the stock's returns is 0.16 and the variance of the market is 0.0625. According to the CAPM, what is the expected return of this stock?

Reference no: EM132966224

Questions Cloud

Analyze the audience-occasion : Analyze the audience, occasion, and purpose in message strategies.
What is the gross debt service ratio : What is their Gross Debt Service (GDS) Ratio? Jasmine and their spouse are considering purchasing a larger house for their growing family.
What is jasmine family average monthly income : What is Jasmine's family average monthly income? Jasmine and their spouse are considering purchasing a larger house for their growing family.
What are the monthly debt payments : What are their monthly debt payments? Jasmine and their spouse are considering purchasing a larger house for their growing family.
What is the expected return of this stock : The variance of the stock's returns is 0.16 and the variance of the market is 0.0625. According to the CAPM, what is the expected return of this stock
Is covered interest arbitrage possible : The one year forward rate is 1.20 $/€. Dollar based interest rate is 6% and Euro based interest rate is 7.5%. Is covered interest arbitrage possible
What is the price of a zero-coupon bond : Question - What is the price of a zero-coupon ($1,000 par value) bond that matures in 16 years has a promised yield of 10.0%
Affordable care act : Given that the AHA appears to generally support the Affordable Care Act, yet specifically opposes certain provisions, is the association's position inconsistent
What skills are still missing : Did you ever think you might like to go into business for yourself?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine the cost of ending work-in-process

Determine the amount of overhead that would be allocated to the proposed job if 40,000 direct labor-hours are used as the volume-based cost driver.

  Analysis of financial statement and cash flow

Calculate the following ratios: 1. Current ratio 2. Debt Ratio 3. Time interest earned 4. Average collection period 5. Inventory turnover

  Define attributes of federal taxation law and business law

Describe and define the attributes of federal taxation law and business law: (a) provide their differences and similarities, (b) why is that important to the accounting, and (c) how does the accountant assure there not ptacticing law without a law li..

  Find which of depreciation method applied in part a

find which of depreciation method applied in part a resulted in the lowest reported book value at the end of 2014? is

  Calculate the balancing allowance or balancing charge

Mr Tan commenced business as a printer.Calculate the balancing allowance or balancing charge in respect of personal computer system 1 disposed of in 2017.

  Should business record a liability for dollar one million

You will lose and have to pay $1 million to another party. No decision has yet been made by the courts. Should your business record a liability for $1 million?

  Calculate the difference in factory overhead costs

Calculate the difference in factory overhead using the two difference, three difference and four difference method. Calculate the difference in factory overhead

  Prepare the journal entries for lobstar ltd for the years

At 30 June 2015, the fair values of both assets were assessed. Prepare the journal entries for Lobstar Ltd for the years ending 30 June 2015 and 2016

  Purchases of shares under the employee share purchase plan

In order to encourage employee ownership of the company’s $1 par common shares, Washington Distribution permits any of its employees to buy shares directly from the company through payroll deduction. Prepare the appropriate journal entry to record th..

  Who in turn would do the same until several checks

Money from these accounts could be mixed or further divided and sent to other accounts or individuals, who, in turn, would do the same, until several checks for $1000 or less eventually arrive at party headquarters.

  Provision for long service leave

A company has a provision for long service leave of $150,000. This amount was recognised as an expense when the provision was created but is deductible for income tax purposes when the leave is taken. If an employee takes long service leave and is pa..

  What is the market price of the bond

The bond matures in 25 years, with a yield to maturity of 4.29 percent, and a par value of $5,000. What is the market price of the bond

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