Business, 06.08.2019 02:30 darantjohnson

Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 6%. suppose also that the expected rate of return required by the market for a portfoliowith a beta of 1 is 13%. according to the capital asset pricing model:
a. what is the expected rate of return on the market portfolio?
b. what would be the expected rate of return on a stock with β = 0?
c. suppose you consider buying a share of stock at $40. the stock is expected to pay $3 dividends next year and you expect i t sellthem for $41. the stock risk has been evaluated at β = -.5. is the stock overpriced or underpriced?

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 15:00

The boston hotel high-end linens 600-thread-count sheets coffeemaker and selected teas imported beer fresh-squeezed juices affordability food and drink double-thick bath towels silk pillowcases raw silk curtains with gold embellishments $100/night four-star rooms free snacks, shampoo, and conditioner free wireless internet

Answers: 3

Answer

Business, 22.06.2019 16:50

According to ceo heidi ganahl, camp bow wow requires a strong and consistent corporate culture to keep all local franchise owners "on the same page" and to follow a common template for the business and brand. this culture could become detrimental over time because: (a) strong consistent cultures are inflexible and incapable of adapting to environmental change (b) strong consistent cultures are too flexible and capable of adapting to environmental change (c) strong consistent cultures don’t perform well in any environment (d) the passing of time provides stability and predictability for businesses

Answers: 2

Answer

Business, 22.06.2019 17:30

What do you think: would it be more profitable to own 200 shares of penny’s pickles or 1 share of exxon? why do you think that?

Answers: 1

Answer

Business, 22.06.2019 19:40

Banana computers has decided to procure processing chips required for its laptops from external suppliers instead of manufacturing them in their own facilities. how will this decision affect the firm? a. the firm will be protected against the principal-agent problem. b. the firm's administrative costs will be low because of necessary bureaucracy. c. the firm will have more flexibility in purchasing and comparing prices of goods and services. d. the firm will have high-powered incentives, such as hourly wages and salaries.

Answers: 3

Answer

You know the right answer?

Suppose the rate of return on short-term government securities (perceived to be risk-free) is about...

Questions