Expected return on stock

Related BrainMass Solutions

• Expected Return

  expected return on stock 2 + proportion invested in stock 3 x expected return on stock 3 + Expected return on portfolio = 25% x 9% + 50% x 10% + 25% x 19% Or ,Expected return on portfolio = 2.25% +

• What does the Beta of a Stock Mean?

  rate)) Expected return on a stock = .05 +(1*(.15-.05)) Expected return on a stock = .05 +.10 Expected return on a stock = .15 The expected return on a stock with a beta=2 will be: Expected return on a stock = Risk-free-rate + (Beta*(Expected

• expected return on a stock with a beta=2.0 twice

  197312 Is the expected return on a stock with a beta=2.0 twice the expected return on a stock with a beta? Is the expected return on a stock with a beta=2.0 twice the expected return on a stock with a beta?

• According to CAPM: What is the expected return on the market portfolio?

  Required return on the stock = risk free rate + beta *(market return - risk free rate) =4%+(-0.5)*(12%-4%)=0% Expected return on the stock = (P1-P0+D1)/P0 P0=40 P1=41 D1=3 Expected return on the stock = (41-40+3)/40 =10% Since expected return

• Expected Return and Beta Risk

  The risk-free rate is 6% and the expected return on the market is 12%. Which of the following stocks is most undervalued? Stock A Expected Return = 11% Beta = 1.5 Stock B Expected Return = 11% Beta = 0.5 21.

• Corporate Finance: Returns, Prices, Equity

  Rate) = CHAPTER 11: PROBLEM 2 Stock A $3,400 Stock B $4,100 Total Value of the Portfolio $7,500 Expected Return on Stock A 9.50% Expected Return on Stock B 15.20% Expected Return on

• Rates of Return and Equilibrium

  Explain, and describe what would happen if the stock were not in equilibrium. If the risk free rate is 9% and the expected rate of return on an average stock is 13%, what are the requried rates of return on stocks c and d?

• Basic concepts in Finance

  A stock has a beta of 1.15, the expected return on the market is 10 percent, and the risk-free rate is 3.5 percent. What must the expected return on this stock be? 5.

• Important Information About Expected Returns and Betas for Investment Selection

  Return Invest Expected Return Beta Premium Rate On Stock a 9.01% 1.70 2.00% 7.00% 10.40% No, expected return lower than required return on stock.

• Required rate of return and investment strategy

  The expected return on stock X is less than the required return. Thus, stock X is overvalued. Sell stock X. The expected return on stock Y is less than the required return. Thus, stock Y is overvalued. Sell stock Y.