1. The standards deviation of stock returns for stock A is 40%. The standard deviation of the market return is 20%. If the correlation between stocks A and the market is 0.70, what is Stock A's Beta
2. An analyst has molded the stock of Crisp Trucking using a two- factor APT model. The risk- free rate is 6%, the expected return on the first factor (r1) is 12%, and the expected return on the second factor (r2) is 8%. If (bi1) = 0.7 and bi2 = 0.9, what is Crisp's required return?
3. An analyst has molded the stock of a company using Fame-French three factor model. The risk- free rate is 5%, the required market return is 10%, the risk premium for small stocks (rsmb) is 3.2%, and the risk premium for value stocks (rhml) is 4.8%. if ai= 0, bi= 1.2, ci= -0.4 and di= 1.3, what is the stock's required return?
Must be done using Excel worksheet.© BrainMass Inc. brainmass.com June 4, 2020, 1:48 am ad1c9bdddf
The solution is attached as an Excel files and calculates the beta of certain stocks when given their standard deviation and the required turn of two types of stock.