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Question: 1. a. Compute an appropriate rate of return for Intel common stock, which has a beta of 1.2. The risk-free rate is 2 percent, and the market portfolio (NYSE stocks) has an expected return of 11 percent.
b. Why is the rate you computed an appropriate rate?

2. Estimating beta) From the graph in the right margin relating the holding-period returns for Aram Inc. to the S&P 500 Index, estimate the firm's beta.

3. (Capital asset pricing model) The data shared below is extracted from Financial Times website on the betas of four companies listed in the FTSE 100 market index in the UK namely Vodafone, Tesco, British Petroleum, and British Telecom, respectively. The return on 3-month U.K. Treasury bills is 1.94 percent and the return on FTSE100 market index is 8 percent. Calculate the expected return for the four stocks

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92296937

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