Why Investors Demand Higher Expected Rates of Return on Stocks

Related BrainMass Solutions

• Why Investors Demand Higher Expected Rates of Return

  425922 Why Investors Demand Higher Expected Rates of Return Explain why investors demand higher expected rates of return on stocks with more variable rates of return.

• Risk and Return

  63686 Risk and Return Statement Please help with the following problem. Risk and Return. True or False? Explain or qualify as necessary. a. Investors demand higher expected rates of return on stocks with more variable rates of return. b.

• Variable Rates of Return

  Why investors demand higher expected rates of return on stocks with more variable rates of return is determined.

• Risk aversion and stocks' prices and earned rates of return

  The risk-averse investors demand higher returns for investments with higher risk.

• Actual vs expect return on stocks

  391105 Actual vs Expect Return on Stocks Do you think that the actual return on each stock for this period will be the same as the expected return (calculated as risk-free rate + market risk premium x beta)? Why or why not?

• Study Questions for Financial Management

  Investors demand higher expected rates of return from stocks with returns that are highly exposed to macroeconomic changes. ?

• How lower interest rates affect the economy

  Investors try to keep their investment returns on stocks in line with the return on bonds, after allowing for the greater riskiness of stocks.

• Multiple Choice

  The appropriate opportunity cost of capital is the return that investors give up on alternative investments with a. The same risk b. The risk-free return c. The expected return on the S&P 500 index d.

• Required rate of return and market price of the stock

  If the risk-free rate is 7 percent and the expected rate of return on an average stock is 11 percent, what are the required rates on Stocks C and D? b.