Q4. A stock has an expected return of 10%. What is its beta? Assume the risk-fre
ID: 2710625 • Letter: Q
Question
Q4.
A stock has an expected return of 10%. What is its beta? Assume the risk-free rate is 7% and the expected rate of return on the market is 17%. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
__________________________________________________
Q5.
Assume both portfolios A and B are well diversified, that E(rA) = 13.0% and E(rB) = 13.7%. If the economy has only one factor, and A = 1 while B = 1.1,What must be the risk-free rate? (Do not round intermediate calculations. Round your answer to 1 decimal place.)
A stock has an expected return of 10%. What is its beta? Assume the risk-free rate is 7% and the expected rate of return on the market is 17%. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Explanation / Answer
Q4)
Expected return = Rf+×Rp
Rf is risk free return
Rp is risk premium
10% = 7%+×(17%-7%)
Beta, = 0.3
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.