1 the risk-free rate of return is 45 percent and the market, Ask an Expert

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1. The risk-free rate of return is 4.5 percent and the market risk premium is 8 percent. What is the expected return for a stock with a beta of 1.32?

2. You wish to make a deposit now in an account earning 5% annual interest rate so that you can get a payment of 1000 at the end of each of the next 15 years. How much should you deposit today?

3. You are considering the purchase of a coupon bond with a face value of $1,000, which matures in 22 years, and pays 5.35% (annual) coupons. If the current market price of the bond is $921.73, estimate the Yield-to-Maturity (YTM) of the instrument. What is the YTM if the coupons are paid semi-annual?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92653702

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