What is the expected return on the stock

Assignment Help Financial Management

Reference no: EM131312988

Suppose you expected the return on the market to be 10% and the return on the risk-free asset to be 2%.

If you are considering a stock with a beta of 1.2, what is the expected return on this stock according to the security market line ? What is the theoretical problem inherent in verifying the CAPM empirically?

Reference no: EM131312988

Questions Cloud

What are barriers to the use of effective prevention measure : Describe effective public health measures for preventing the spread of Zika virus. What are some barriers to the use of effective prevention measures?

The security market line and the capital market line : If asset A's beta is greater than asset B's beta, does this mean that asset A has more risk than asset B? Explain?- What is the difference between the security market line and the capital market line?

Calculate the number of elements that will be allocated : Calculate the number of elements that will be allocated when using an array of arrays implementation and a list of lists implementation of the Array2D abstract data type for each of the following 2-D array sizes:

Orkand account because of kyle cross : A week later, Tom is complaining to George that he may lose the Orkand account because of Kyle Cross. Tom questions why George did not tell Kyle that the Orkand account was his, and George explains that Kyle is a legitimate competitor.

What is the expected return on the stock : If you are considering a stock with a beta of 1.2, what is the expected return on this stock according to the security market line ?

How biosecurity is used to minimize biological threats : Assignment Objectives: Describe how biosecurity is used to minimize biological threats. Discuss the policies concerning development of medical countermeasures.

What is meant by the homogeneous assumption in the capm : Why is the CAPM's assumption that investors can borrow and lend at the risk-free rate questionable?- What is meant by the "homogeneous assumption" in the CAPM?

Devise a strategy for decreasing the size of the array : Modify your implementation of the Vector ADT from the previous question to include your reduction strategy.

Estimate the cost of the system : What capabilities beyond the minimum do you need now and so that your computer does not become obsolete, what additional features do you think you will need within the next 2 or 3 years?

User Account

All Pages