A stock has an expected return of 7.72 percent, the risk-free rate is 2.9 percent, and the market riskpremium is 5.41 percent. What must the beta of this stock be? Answer to two decimals.

We can calculate Beta by using the CAPM model as it helps in showing the relationship between the…

Answered: A stock has an expected return of 7.72…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

A stock has an expected return (rs) of 10.4%, the risk-free rate (TRF) is 1.7%, and market risk premium (M-TRF) is 8.3%. What is this stock's Beta? Enter your answer as a number with two decimal places of precision (i.e. 1.23)
A certain stock has a beta of 1.3. If the risk-free rate of return is 3.9 percent and the market risk premium is 7.4 percent, what is the expected return of the stock? What is the expected return of a stock with a beta of 1.21? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
Stock Y has a beta of 0.6 and an expected return of 8.89 percent. Stock Z has a beta of 2.1 and an expected return of 14.07 percent. What would the risk-free rate (in percent) have to be for the two stocks to be correctly priced relative to each other? Answer to two decimals.
Assume that the risk-free rate is 6.5% and the market risk premium is 6%. What is the required return for the overall stock market? Round your answer to one decimal place. What is the required rate of return on a stock with a beta of 1.8? Round your answer to one decimal place.
A stock has a beta of 0.73, the expected return on the market is 0.08, and the risk-free rate is 0.03. What must the expected return on this stock be? Enter the answer with 4 decimals (e.g. 0.1234).
A stock has an expected return of 15.2 percent, the risk-free rate is 3.4 percent, and the market risk premium is 9.3 percent. What must the beta of this stock be? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
The stock market can have three potential returns with the following probabilities. Note "otherwise" is whatever probability it takes for all three probabilities to sum to one. So, if the first two probabilities are each .30, then "otherwise" represents a probability of .40. Probability Return -0.04 0.24 0.38 otherwise 0.00 0.18 What is the stock market's standard deviation? Enter your answer in decimal form, and show 4 decimal places.
A stock has an expected return of 0.11, its beta is 1.22, and the risk-free rate is 0.03. What must the expected return on the market be? Enter the answer with 4 decimals (e.g. 0.0567).
A stock has a beta of 1.88. The risk free rate is 1.775% and the market risk premium is 5%. What is the fair return on the stock? Answer as a percent. Use at least 2 decimal places in your response. Enter only numbers and decimals.
A stock's beta is 1.6 and the market risk premium is 7.7%. If the risk-free rate is 3.5%, what is the stock's required return according to CAPM? Answer as a percent and round to 2 decimal places. Answer:
A stock has an expected return of 15.6 percent, the risk-free rate is 6.2 percent, and the market risk premium is 7.7 percent. What must the beta of this stock be? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) Beta
Assume that the risk-free rate is 2.5% and the market risk premium is 8%. What is the required return for the overall stock market? Round your answer to one decimal place. ? % What is the required rate of return on a stock with a beta of 0.5? Round your answer to one decimal place. ? % The above is a two part question, therefore the second answer is determined based off the first answer provided. Please, please, please do provide both answers.

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A stock has an expected return of 7.72 percent, the risk-free rate is 2.9 percent, and the market risk premium is 5.41 percent. What must the beta of this stock be? Answer to two decimals.