If the risk-free rate of return is 2.1%, the beta of the mutual fund is 1.7, and the return of market is 5%, what is the required rate of return?
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- Suppose risk-free rate of return = 2%, market return = 7%, and Stock B’s return = 11%. a. Calculate Stock B’s beta. b. If Stock B’s beta were 0.80, what would be its new rate of return?Assume that the risk-free and rate is 5.50% and the market risk premium is 7.75%. What is the expected return for the overall stock market (rm)?The risk-free rate is 2%, the market risk premium is 8.00%, and portfolio A has a beta of 2. What is the required rate of return on this portfolio?
- e) What is a constant dollar plan?f) What are the components of the risk-free rate?g) What is financial risk?h) If the standard deviation of a stock’s return is 5% and its expected return is 8%, what it the C.V.?The NXP fund has an expected return of 3.60%, with volatility 24.00%. The risk free rate is 1.70%, the market volatility is 10.90%, and the correlation between NXP returns and market returns is 0.79. What is the Treynor ratio for NXP?Suppose risk-free rate of return = 2%, market return = 7%, and Stock B’s return = 11%. Calcuate Stock B’s beta. If Stock B’s beta were 0.80, what would be its new rate of return?
- What are the components of the risk-free rate and What is financial risk? If the standard deviation of a stock’s return is 5% and its expected return is 8%, what it the C.V.?Given a real rate of interest of 2%, an expected inflation premium of 3%, and risk premiums for investments A and B of 4% and 6%, respectively, find the following. The risk-free rate of return, rfConsider an asset with a beta of 1.2, a risk-free rate of 4.3%, and a market return of 12%. What is the reward-to-risk ratio in equilibrium? What is the expected return on the asset?
- a. If your required rate of return is 7.60percent, what is the value of the stock for you? b. Should you make the investment3) The risk free rate is 3.5% The expected return of a well-diversified fund is 13% and the beta is 1.15. The expected return of the Market is 9%. Compare both investments using the M² ratio.(a) What is CAPM and what purposes does it serve in finance in general, and in investments in particular? Discuss (b) Outline and explain the main assumptions of CAPM. What limitations do these place on its practical application? Explain (c)The risk premium of the market portfolio is 9 %, the risk free rate is 5 % and the beta estimate for AELZ is β = 1.3. What is the risk premium? What is the expected rate of return?