A stock has an expected return of 0.15, its beta is 0.75, and the risk-free rate is 0.05. What must the expected return on the market be? Enter the answer with 4 decimals (e.g. 0.0567).
Q: onsider the following two Treasury securities: Bond Price Modified duration (years) A $100 6…
A: Modfied duration indicates that how much would decrease or increase in prices of bonds with increase…
Q: Which of the following statements is incorrect? If a firm's target average accounting return is…
A: 1) Average accounting return is the average net profit divided by the average book value of the…
Q: Which of the following is the advantage of swaps? Answer choices: a. Early termination of swaps…
A: Swap means a contract of exchanging one financial instrument with another between the parties…
Q: Consider the following cash flows of the three independent projects available to the company. Assume…
A: Given,
Q: Stephanie Carter has been gifted a sum of $50,000 by her grandparents on completing her graduation…
A: Given, Amount gifted is $50,000 tax rate is 25%
Q: q1- Bunning Warehouse wants to balance the prices for selling 500 trees. Data is in the screenshot.…
A: Total profits refer to the amount remaining with a company after it has paid all its liabilities. It…
Q: (C) Assuming that bank charges simple interest, P 50,000 will accumulate to P 57,500 at rate i per…
A: We have; Principal amount of P50,000 increased to P57,500 So total simple interest earned is…
Q: Calculate the expected value of the scenario. X₁ P(x₁) -$0.25 0.1 SO 0.5 $0.25 0.1 $0.50 0.3
A: Xi P(Xi) $ -0.25 0.1 $ - 0.5 $ 0.25 0.1 $…
Q: What are the components of a Federal Formula Grant?
A: A Federal Formula Grant is essentially a type of U.S. federal grant. This grant has a specific and…
Q: Melissa is starting a savings for the initial capital to start a jewelry company right after…
A: With number of compounding in a year (n) and nominal interest rate (i), the effective annual…
Q: Using the data below, calculate the following ratios. Cash 4500…
A: Interest coverage is a measure that helps to evaluate whether the company can meet its interest…
Q: Describe the differences between input and output in healthcare budgeting.Explain it? Asap
A: Input and output budgeting: This type of budget shows cost estimates and funding levels as input and…
Q: nt, what is the current share price?
A: Information Provided: Year 1 Dividend = $5.40 Year 2 Dividend = $16.40 Year 3 Dividend = $21.40…
Q: DUB company is considering a new 3-year expansion project that requires an initial fixed asset…
A: Net Present Value The difference between an investment's cash inflow and cash outflow is known as…
Q: nsider the following two Treasury securities: Bond Price Modified duration (years) A $100 6 B…
A: Modified duration shows that how much would be the change in the price of bond with change in the…
Q: Hoe much money must you invest today in order to withdraw P1000 per month for 10 years if the…
A: Monthly withdrawal (C) = P1,000 Monthly interest rate (r) = 0.01 (i.e. 0.12 / 12) Number of…
Q: a) What is the payback period for this project? b) If a hurdle rate of 20% is considered; what is…
A: Payback Period: It is one of the methods used in capital budgeting to determine the period in which…
Q: Regarding question 4. can you calculate the Bond value for pleasant Innovation? the question never…
A: Pleasant Innovation: Data given: Face Value=$100 Issue Price=$100*98% = $98 Coupon rate=3% (paid…
Q: In real dollars, $500 on August 14, 2011 plus $1000 on August 14, 2016 is equivalent to $1705 on…
A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: The most liquid asset is:* A. A car B. A computer C. A house D. Money in a checking account E.…
A: An asset that is easily convertible into cash and can be done so quickly is referred to as being…
Q: Date DJIA S&P 500 January 6 11,998 1,278 January 13 12,022 1,289…
A: Date DJIA S&P 500 Jan-06 11,998.00 1,278.00 Jan-13 12,022.00…
Q: Analyze the dividend policy of RIL for shareholders’ wealth maximization and advise on an optimal…
A: We have to analyze the current dividend policy of Reliance Industries Limited (RIL) and answer…
Q: For a 10-year $1000 par value 10% annual coupon bond that is selling at a discount and makes…
A: Information Provided: Period = 10 years Par value = $1000 Annual Coupon Rate = 10%
Q: What is fundamental analysis and where and when would it apply to a business decision.
A: A stock is known the share in a company which represents ownership in a company. The owners of the…
Q: A sports nutrition company is examining whether a new high-performance sports drink should be added…
A: DCF is the valuation of an investment by using the cash flows for n period at discounted rates.…
Q: It's acceptable to use the Black-Scholes formula or binomial trees to value real options,even though…
A: Black Scholes and binomial models are the valuation models to value an option.
Q: The personal tax on interest payments is 33%.The personal tax rate on equity capital gain is 15%.The…
A: Information about personal taxes on different instruments of finance had been provided. We have to…
Q: Find the gross income, the adjusted gross income, and the taxable income. A taxpayer earned wages of…
A: Data given: Wages=$61,300 Interest from savings account= $880 Contribution to a tax deferred…
Q: There are several different types of operating budgets. Which of these types of budgets do you think…
A: Operating a hospital-based lab requires careful planning about staff, types of equipment, supplies,…
Q: Five Star Corporation will pay a dividend of $4.15 per share next year. The company pledges to…
A: Information Provided: Dividend for next year = $4.15 Growth rate = 6.25% Required return = 9%
Q: Due to the ___________, the total rate of return on a stock can be positive even when the stock's…
A: Solution: When money is invested in stocks, the investor earns two types of yield: a) Dividend yield…
Q: f a company gains 40 $ for every 1000$ in revenue for a certain product, what is the profit margin…
A: Profit Margin is the percentage of profit earned over its net sales. It can be calculated as under.…
Q: Use the 2016 marginal tax rates to compute the tax owed by the following person. A married woman…
A: Taxable income = $198,000 Tax owed = ? Tax owed is the liability to pay taxes to government on…
Q: Quantitative Problem: You are holding a portfolio with the following investments and betas: Stock…
A: Total investment = $1,000,000 Market required return (Rm) = 0.11 Risk free rate (Rf) = 0.04…
Q: Define the functions of the Over-The-Counter’s financial market that treasury staff must be aware of…
A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…
Q: usly. (a) If we invest like this for 3 years, what is the value of the account after the third…
A: The compounding continously is logarithmic form of the growth and this is an imaginary situation and…
Q: Ferrari Corp., an automotive producer with a current debt-to-equity ratio of 3, is considering…
A: We need to find the unlevered cost of equity of the bicycle industry, first and then lever it to…
Q: s capital rationing a must for companies in order to stay relevant?
A: Capital rationing help companies selecting the best project and increase the return on investment…
Q: Suppose that the local sales tax rate is 4% and you purchase a car for $24,800. a. How much tax is…
A: When a customer purchase goods or services he is liable to pay local sales tax. It is an indirect…
Q: Using Table 19-1 and Table 19-2 find the following premiums for a 10-year term life insurance policy…
A: Life insurance is quite essential part of life now days and it is used by everyone for the safety of…
Q: Titan Mining Corporation has 9 million shares of common stock outstanding, 250,000 shares of…
A: The IRR is the rate of return that equates the present value of cash inflows and the initial…
Q: Imagine a situation where European options on some underlying stock have the following relationship.…
A: Arbitrage:- When you have several options listed on the same asset, you might be able to lock in…
Q: 1. A stock has a beta of 1.15 and an expected return of 14 percent. A risk-free asset Currently…
A: a. Expected return of a portfolio with 2 assets can be determined with the formula below:Expected…
Q: Ogren Corporation is considering purchasing a new spectrometer for the firm’s R&D department. The…
A: Cashflow The cash which flows inward and outward from the business or the project is known as cash…
Q: ABC Company is considering a project with initial investment $100,000 (a machine) and working…
A: Concept. NPV and Discounted Payback are capital budgeting techniques used to make investment…
Q: Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the…
A: A bond is a debt instrument used by companies to raise capital from their investors. The investors…
Q: The spot price of a stock is $61.40 and it pays continuous dividends at a rate of 5%. Assume that…
A: Profit booking, also known as profit taking, occurs when individuals or businesses sell their…
Q: I need help with finance home work question asap please A company is considering a project that…
A: Average accounting return It is calculated as shown below. Average accounting return=Average annual…
Q: Two cash flow streams below are equivalent at TVOM = i%, which has a greater value and why, X or Y?…
A: We can determine which value is greater X or Y by doing some calculations. It is known that the…
Q: You borrow $1,000 from the bank and agree to repay the loan over the next year in 12 equal…
A: The Present Value of Ordinary Annuity refers to the concept which gives out the discounted or…
A stock has an expected return of 0.15, its beta is 0.75, and the risk-free rate is 0.05. What must the expected return on the market be? Enter the answer with 4 decimals (e.g. 0.0567).
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- A stock has an expected return of 0.15, its beta is 0.52, and the expected return on the market is 0.08. What must the risk-free rate be? (Hint: Use CAPM) Enter the answer in 4 decimals e.g. 0.0123.A stock has a beta of 0.73, the expected return on the market is 0.08, and the risk-free rate is 0.03. What must the expected return on this stock be? Enter the answer with 4 decimals (e.g. 0.1234).Assume the expected return on the market is 7 percent and the risk-free rate is 4 percent. a. What is the expected return for a stock with a beta equal to 1.10? (Enter your answers in decimals. Do not enter percent values.) b. What is the market risk premium? (Enter your answers in decimals. Do not enter percent values.)
- The stock market can have three potential returns with the following probabilities. Note "otherwise" is whatever probability it takes for all three probabilities to sum to one. So, if the first two probabilities are each .30, then "otherwise" represents a probability of .40. Probability Return -0.04 0.24 0.38 otherwise 0.00 0.18 What is the stock market's standard deviation? Enter your answer in decimal form, and show 4 decimal places.Assume the expected return on the market is 9 percent and the risk-free rate is 4 percent. What is the expected return for a stock with a beta equal to 1.80? (Round answers to 2 decimal places, e.g. 15.25.) What is the market risk premium? (Round answers to 2 decimal places, e.g. 15.25.)Assume the risk-free rate is 2%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. Do not round intermediate calculations. Round your answers to two decimal places.
- A stock has an expected return (rs) of 10.4%, the risk-free rate (TRF) is 1.7%, and market risk premium (M-TRF) is 8.3%. What is this stock's Beta? Enter your answer as a number with two decimal places of precision (i.e. 1.23)Assume the expected return on the market is 14 percent and the risk-free rate is 4 percent. What is the expected return for a stock with a beta equal to 1.00? (Round answers to 2 decimal places, e.g. 15.25.) Expected return What is the market risk premium? (Round answers to 2 decimal places, e.g. 15.25.) Market risk premiumThe risk-free rate is 3% and the market risk premium is 9%. If stock A has a beta of -0.9, what is the stock's required rate of return? answer format: show your answer in percent (without the % sign) and to 1 decimal place. For example, 12.56 should be shown as 12.6
- Suppose that three stocks (A, B, and C} and two common risk factors (1 and 2) have the following relationship: E(RA) = (1.1)A1 + (0.8)A2 E(RB) = (0.7)A1 + (0.6)A2 E(RC) = (0.3)A1 + (0.4)A2 a. If A1 = 4 percent and A2 = 2 percent, what are the prices expected next year for each of the stocks? Assume that all three stocks currently sell for $30 and will not pay a dividend in the next year. b. Suppose that you know that next year the prices for Stocks A, B, and C will actually be $31.50, $35.00, and $30.50. Create and demonstrate a riskless, arbitrage investment to take advantage of these mispriced securities. What is the profit from your investment? You may assume that you can use the proceeds from any necessary short sale. Problems 13 and 14 refer to the data contained in Exhibit 7.23, which lists 30 monthly excess returns to two different actively managed stock portfolios (A and B) and three different common risk factors (1, 2, and 3). {Note: You may find it…What are the expected returns for stocks Y and Z under the conditions shown below? A0 0.04 k1 0.07 k2 0.05 by,1 0.5 by,2 1.3 bz,1 1.2 bz,2 0.9A stock has an expected return of 11.85 percent, its beta is 1.08, and the risk-free rate is 3.9 percent. What must the expected return on the market be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Market expected return %