An analyst has modeled the stock of Crisp Trucking using a two-factor APTmodel. The risk-free rate is 5%, the expected return on the first factor (r₁)is 14%, and the expected return on the second factor (r2) is 8%. If bil0.5 and bi2 = 0.8, what is Crisp's required return? Do not roundintermediate calculations. Round your answer to one decimal place.%=

As per two factor APT model,Required return =Rf+[bi1∗(r1−Rf)]+[bi2∗(r2−Rf)]whereRf = risk free rate…

An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The risk-free rate is 5%, the expected return on the first factor (₁) is 14%, and the expected return on the second factor (r2) is 8%. If bi1 0.5 and bi2 = 0.8, what is Crisp's required return? Do not round intermediate calculations. Round your answer to one decimal place. = %

An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The risk-free rate is 5%, the expected return on the first factor (₁) is 14%, and the expected return on the second factor (r2) is 8%. If bi1 0.5 and bi2 = 0.8, what is Crisp's required return? Do not round intermediate calculations. Round your answer to one decimal place. = %

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter3: Risk And Return: Part Ii

Section: Chapter Questions

Problem 2P: APT An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The risk-free...

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An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The risk-free rate is 6%, the expected return on the first factor (r1) is 12%, and the expected return on the second factor (r2) is 8%. If bi1 = 0.7 and bi2 = 0.9, what is Crisp’s required return?
An analyst has modeled the stock of Crisp Trucking using a two-factor APTmodel. The risk-free rate is 6%, the expected return on the first factor (r1) is12%, and the expected return on the second factor (r2) is 8%. If bi1 5= 0.7 andbi2 5= 0.9, what is Crisp’s required return?
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