suppose a risk free rate is 6% and the market premium is 7%. D1 is 1.25 per share and stock beta is 1.15. What is the required return?

Q: A stock has an expected return of 6%. What is its beta? Assume the risk-free rate is 8% and the…

A: Given details: Expected return = 6% Risk free rate = 8% Expected Market Return = 18% From the above…

Q: Assume that the risk-free rate is 7.5% and the required return on the market is 11%. What is the…

A: Risk free rate = 7.5% Market return = 11% Beta = 2

Q: The current risk-free rate of return, rRF, is 4 percent and the market risk premium, RPM, is 8…

A: The formula to calculate the required rate of return using CAPM is as follows:Return = Riskfree rate…

Q: Assume that the risk-free rate is 5% and that the market risk premium is 6%. What is the required…

A: Required return = Risk free rate + Beta * Market risk premium

Q: A stock has a required return of 11%, the risk-free rate is 6%, and the market risk premium is 3%.…

A: CAPM states:Re = Rf + B (MRP)Required return =11% Risk free rate= 6% Market risk premium =3%

Q: expected

A: Introduction: Capital asset pricing model or CAPM as it is known widely is a tool which helps in…

Q: Assume that the risk-free rate is 6.5% and the required return on the market is 10%. What is the…

A: To calculate the required rate of return on a stock, we need to use capital asset pricing model…

Q: Assume that the risk-free rate is 3.5% and the expected return on the market is 10%. What is the…

A: Details given to us are : Risk free rate = 3.5% Expected return on market = 10% Beta = 0.7 We need…

Q: Stock A has a risk premium of 5.6 percent. If Treasury bills yield 2.3 percent and the expected…

A: The evaluation of the systematic risk or volatility of a stock or the portfolio as compared to the…

Q: Assume that the risk-free rate of interest is 6% and the expected rate of return on the market is…

A: Answer: Beta of a stock is -0.2 Introduction: Beta is nothing but a function of the volatility of a…

Q: A stock has a required return of 9%, the risk-freerate is 4.5%, and the market risk premium is 3%.a.…

A: Capital Asset Pricing Model (CAPM): CAPM is the method of calculating the expected return on…

Q: The risk-free rate is 5.6%, the market risk premium is 8.5%, and the stock's beta is 2.27. What is…

A: Following details are given in the question: Risk free rate = 5.6% Market Risk premium = 8.5%…

Q: The risk-free rate of return is currently 0.02, whereas the market risk premium is 0.05. If the beta…

A: Given information: Risk free rate of return is 0.02 Market risk premium is 0.05 Beta value of stock…

Q: Suppose that the risk-free rate is 5% and that the market risk premium is 7%.What is the required…

A: Risk free rate = 5% Market risk premium = 7% Beta 1 = 1 Beta 2= 1.7

Q: porter's Inc.'s stock has an expexted return of 12.5%, a beta of 1.25, and is in equilibrium. If the…

A: Computation of market risk premium:Market risk premium is 8.40%.Excel spread sheet:

Q: The risk free rate is 5% and the expected return on the market portfolio is 13%. A stock has a beta…

A: The expected return is the return that the individual expected to gain in the investment over the…

Q: The current risk-free rate of return is 2.5 percent and the market risk premium is 5 percent. If the…

A: The return which the investors are expected in order to invest in specific securities is referred to…

Q: A share has a beta of 0.90, the expected return on the market is 8.5% and the risk-free rate is 2.2%…

A: Beta = 0.90 Market return = 8.5% Risk free rate = 2.2%

Q: Assume that the risk-free rate is 6% and the expected return on the market is 13%. What is the…

A: In the given question we are required to calculate the Required rate of return of stock using…

Q: Assume that the risk-free rate is 6.5% and the required return on the market is 8%. What is the…

A: Given: Risk free rate =6.5%Required rate on the market =8%Beta =0.6

Q: The expected return on Share X is 15.75% while the risk-free rate of return is 7%. If the expected…

A: Expected return =Rf + beta * ( Rm- Rf) Rf = Risk free rate Rm =Expected return on market

Q: What is the expected return on a stock with a beta of 1.40, if the riskless rate is 4% and the…

A: In this question we need to find expected return according to CAPM. According to CAPM: Expected rate…

Q: Assume the expected return on the market is 14 percent and the risk-free rate is 4 percent. What is…

A: The risk premium is the difference between the expected market rate and the risk-free rate. It is…

Q: When the return on the market portfolio goes up by 5%, the return on Stock A goes up on average by…

A: Return is the basic factor which affects the investor’s decision. CAPM is the tool which is used to…

Q: A stock has an expected return of 14.1 percent, a beta of 1.8, and the return on the market is 9.8…

A: Expected return (Re) = 14.1% Beta (B) = 1.8 Market return (Rm) = 9.8% Risk free rate = Rf

Q: Assume that the risk-free rate is 7.5% and the required return on the market is 13%. What is the…

A: In the Given Question we require to calculate the required rate of return on a stock using following…

Q: Assume that the risk-free rate is 5 percent and the market risk premium is 6 percent. What is the…

A: This question has two parts: First we need to compute the Expected return of overall stock market…

Q: The risk-free rate of return is currently 0.03, whereas the market risk premium is 0.04. If the beta…

A: Following details are given in the question: Risk free rate of return = 0.03 = 3% Market Risk…

Q: What is the expected return for a stock that has a beta of 1.4, if the risk-free rate is 5%, and the…

A: Capital Asset pricing model: This model is used to determine the required rate of return on the…

Q: Stock R has an expected rate of return of 9.5%, stock S has a beta of 1.2, the expected rate of…

A: In the given question we require to compute the beta of stock R and expected rate of return for…

Q: What must the expected return on the market be?

A: Introduction: The expected return of market is considered to be an important concept because it is…

Q: The risk-free rate is 5.6%, the market risk premium is 8.5%, and the stock’s beta is 2.27.  What is…

A: The risk-free rate is 5.6%, beta is 2.27 and market risk premium is 8.5%. Capital Asset Pricing…

Q: A stock has an expected return of 13.1%, its beta is 1.70, and the risk free premium rate is 2.6%.…

A: In the given question we require to calculate the expected return on market from the following…

Q: Assume that the risk-free rate is 7.5% and the required return on the market is 10%. What is the…

A: The question is based on the concept of the capital asset pricing model (CAPM), the model explains…

Q: Porter's Inc.'s stock has an expexted return of 12.5%, a beta of 1.25, and is in equilibrium. If the…

A: Following details are given in the question for Porter's Inc Stock: Expected Return = 12.5% Beta =…

Q: Suppose that the risk-free rate is 3% and the market risk premium is 8%. According to the CAPM,what…

A: The capital asset pricing model is the tool used to analyze the relationship between the risk and…

Q: Spider Corp has a beta of 1.7. The risk-free rate is 1.6% and the market risk premium is 5.2% .(Note…

A: Following details are given in the question regarding Spider Corp: Beta = 1.7 Risk free rate = 1.6%…

Q: Consider the CAPM. The risk-free rate is 6%, and the expected return on the market is 18%. What is…

A: In the given question we need to calculate the expected return on a stock using CAPM i.e. Capital…

Q: If the interest rate on T Bills is 2% and the market risk premium is 6%, what is the CAPM-implied…

A: interest rate on T-bills or risk free rate is 2% Market risk premium is 6% Beta is 1.25   To Find:…

Q: If the risk-free rate of return, PRF İS 4% and the market return, rM is expected to be 12%, what is…

A: Given Details are : rRF = 4% rM = 12% Beta = 2.5 From these details we need to compute Required rate…

Q: What is the expected return for ABC Stock if the risk-free rate is 3.0%, the market risk premium is…

A: The mathematical representation of the formula is:

Q: The risk-free rate of return is currently 0.02, whereas the market risk premium is 0.07. If the beta…

A: Capital Pricing Model (CAPM) is an investment theory that shows the relationship between the…

Q: What is the expected return on a stock with a beta of .8, given a risk-free rate of 3.5% and an…

A: In this question we need to compute the expected return on stock. This question can be solved using…

Q: Two stocks, A and B, have beta coefficients of 0.8 and 1.4, respectively. If the expected return on…

A: The evaluation of the systematic risk or volatility of a stock or the portfolio as compared to the…

Q: Assume that the risk-free rate is 7% and the required return on the market is 9%. What is the…

A: Every investor invests the amount in some securities in order to get a good return, however, the…

Q: The risk-free rate of return is currently 0.04, whereas the market risk premium is 0.06. If the beta…

A: In this question we need to compute the expected return on RKP. We can solve this que with CAPM…

Q: Using CAPM, A stock has an expected return on 10.7 percent, the risk-free rate is 4.1 percent, and…

A: In this question we need to calculate the Beta of the stock from the details given. We can solve…

Q: a. A stock has a beta of 1.2, the expected return on the market is 17 percent, and the risk-free…

A: Following details are given to us: Beta = 1.2 Expected return on Market = 17% Risk free rate= 8% We…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.