User Account

All Pages

What is the risk-free rate

Assignment Help Finance Basics
Reference no: EM132473956

Suppose that the Capital Asset Pricing Model (CAPM) holds. The market portfolio has an expected return of 9% and a standard deviation of 16%. Stock AAA has an expected return of 12%, a beta of 1.4, and a standard deviation of 28%.

a. What is the risk-free rate?

b. What is the alpha of stock AAA?

c. What proportion of the total risk of stock AAA is idiosyncratic?

Reference no: EM132473956

Questions Cloud

How is working capital handled in calculation of cash flow : How is working capital handled in the calculation of cash flows from a capital investment? Is it added, subtracted, or ignored? Explain the rational
Determine the amount of direct material direct labor : Evaluate these costs, and determine the amount of direct material direct labor, factory overhead, and selling/general/administrative costs
Calculate the seven-point moving averages for the series : Business Mathematics Assignment - Calculate the seven-point moving averages for the series. Plot a scatter diagram of the data. What does your chart suggest
What is the most that charlie can afford to pay : What is the most that Charlie can afford to pay for the house?
What is the risk-free rate : a. What is the risk-free rate? b. What is the alpha of stock AAA? c. What proportion of the total risk of stock AAA is idiosyncratic?
How much should you have in total at the end of 25 years : If you never withdraw any funds from the account, if all funds earn the going rate of return for the time period, and if all of your savings
What part of kyle automobile insurance : When he came out in the morning all four of his tires had been slashed by vandals. What part of Kyle's automobile insurance would cover this damage?
Formidable takeover defenses : What would you expect to happen to the share price when management proposes to institute such defenses?
Calculate depreciation expense under the units-of-production : Calculate the depreciation expense under the units-of-production method, assuming the actual number of units produced was 71,000 in 2016 and 118,600 in 2017.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd