Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

A stock has a beta of 1.2 and the standard deviation of its returns is 25%. The market risk premium is 5% and the risk-free rate is 4%.

a. What is the expected return for the stock?
b. What are the expected return and standard deviation for a portfolio that is equally invested in the stock and the risk-free asset?
c. A financial analyst forecasts a return of 12% for the stock. Would you buy it? Why or why not?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M928428

Have any Question? 


Related Questions in Basic Finance

Ginormous oil entered into an agreement to purchase all of

Ginormous Oil entered into an agreement to purchase all of the outstanding shares of Slick Company for $50 per share. The number of outstanding shares at the time of the announcement was 82 million. The book value of lia ...

If there are costs associated with financial distress how

If there are costs associated with financial distress, how may this affect the capital structure decision of a company? Why do we adjust for taxes in determining the cost of debt, but not for the costs of preferred stock ...

Suppose your firm had issued a 12 percent annual coupon

Suppose your firm had issued a 12 percent annual coupon, 15-year bond, callable at par at the 8th year. It is now two years later, so the bonds are not callable for another 6 years. At this time, new bonds could be issue ...

Assignment 2 required assignment 2-genesis energy capital

Assignment 2: Required Assignment 2-Genesis Energy Capital Plan Report The Genesis Energy operations management team, nearing completion of its agreement with Sensible Essentials, was asked by senior management to presen ...

Beta electronics is considering the purchase of testing

Beta Electronics is considering the purchase of testing equipment that will cost $633,000 to replace old equipment. Assume the new equipment will generate before-tax savings of $281,000 over the four years. The new equip ...

1 what factors must one consider when deciding on the

1 .What factors must one consider when deciding on the appropriate underlying asset for a hedge? 2. For each of the following hedge termination dates, identify the appropriate contract expiration. Assume the available ex ...

1 develop a topic of interest to you and prepare both a

1. Develop a topic of interest to you, and prepare both a structured and an unstructured interview. Collect data from your classmates, and develop a method for coding the findings. 2. Create a sampling frame, and collect ...

1 what is the difference between the short position and the

1. What is the difference between the short position and the long position in a futures market? 2. Give an example of how someone might hedge using a commodity futures and give an example of how someone might hedge using ...

1 some industries described in this chapter are controlled

1. Some industries described in this chapter are controlled by federal regulatory agencies. How does this affect their accounting systems? 2. When reviewing the financial statements of oil and gas companies, why is it im ...

The harvester collects 25 percent of sales in the month of

The Harvester collects 25 percent of sales in the month of sale, 60 percent of sales in the month following the month of sale, and 15 percent of sales in the second month following the month of sale. During the month of ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro