Suppose the beta of PetrolCom is 0.75, the risk - free rate is 3 percent, and the market risk premium is II percent. Calculate the expected rate of return on PertrolCom.
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Suppose the beta of PetrolCom is 0.75, the risk - free rate is 3 percent, and the market risk premium is II percent. Calculate the expected
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- Assume that the risk-free rate, RF, is currently 9% and that the market return, rm, is currently 16%. a. Calculate the market risk premium. b. Given the previous data, calculate the required return on asset A having a beta of 0.4 and asset B having a beta of 1.8.Asset W has an expected return of 21.3 percent and a beta of 2.05. If the risk-free rate is 3.5 percent, what is the market risk premium?Asset X has an expected return of 10% and volatility of 10% . If its Sharpe Ratio is 0.60, what is the risk-free rate?
- Consider 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?Suppose the CAPM is true. Consider two assets, X and Y, and the market M. Suppose cov(X,M) = .3, cov(Y,M) = .5. %3D (a) Is the expected return higher on X or Y? (b) Suppose var(M) = 1.5, what are the betas of X and Y? (c) Suppose the expected market return is 20% and the risk free rate is 5%, what is the expected returns of X and Y?. (d) Given your analysis in (a)-(c), what type of investor would prefer asset X to asset Y?Use the basic equation for the capital asset pricing model (CAPM) to find therequired return for an asset with a beta of 2.20 when the risk-free rate and market return are 8% and12%, respectively.
- 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?If the expected rate of return on AZNG is 12.72, its beta is 1.09 and the market risk premium is 8%, what is the risk-free rate?What is the expected risk-free rate of return if asset X, with a beta of 1.5, has an expected return of 20 percent, and the expected market return is 15 percent?
- If X-Co has a Beta of 1.6, and the risk-free rate is 4.5%, and the average market risk premium is 6%, what is X-Co’s estimated required return per the CAPM? (show calculations)Assume that the risk free rate is currently 3% and that the market retunr is currently 11%. Calculate the market risk premium Give the previous datea, calculate the required retun on asset A having a beta of 0.3 and asset B having a beta of 1.5.Suppose the market premium is 12%, market volatility is 20% and the risk-free rate is 6%. Suppose a security has a beta of 0.8. Using the CAPM, what is its expected return?