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    2-3 Assume that a risk-free rate is 6% and the market risk premium is
    6%. What is the expected return for the overall stock market?
    What is the required rate of return on a stock that has a beta of 1.2?

    2-4 Assume that the risk-free rate is 6% and the expected rate of return
    on the market is 13%. What is the required rate of return on a
    stock that has a beta of 0.7?

    2-7 Suppose rRF =14%, and b1 = 1.3.

    a. What is the ri, the required rate of return on Stock i?
    b. Now suppose rRF (1) increases to 10 per cent or (2) decreases to 8
    percent. The slope of the SML remains constant How would this
    affect rM and ri??
    c. Now assume rRF remains at 9 percent but rM (1) increases to 16
    percent or (2) falls to 13 percent. The slope of the SML does not
    remain constant. How would these affect ri?

    2-9 Suppose you are the money manager of a $4 million investment
    fund. The fund consists of 4 stocks with the following investments
    and betas:

    Stock Investments Beta
    _______________________________________________

    A S 400,000 1.5
    B 600,000 (0.50)
    C 1,000,000 1.25
    D 2,000,000 0.75

    If the market required rate of return is 14 percent and the risk-free
    rate is 6%, what is the fund's required rate of return?

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    https://brainmass.com/business/finance/finance-questions-114552

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    2-3 Assume that a risk-free rate is 6% and the market risk premium is
    6%. What is the expected return for the overall stock market?
    What is the required rate of return on a stock that has a beta of 1.2?

    rs = rf + (rm - rf)b where rs is the stock's required rate of return
    rm is the market required rate of return
    rf is the risk free rate
    b is the beta

    Please note that (rm - rf) is equal to the market risk premium, and rf is equal to real inflation-free rate of return or Treasury bill rate

    rs = 0.06 + (0.06)1.2
    rs = 0.132 or 13.20%

    If rf is equal to 0.06, then rm will be equal to 0.12.

    2-4 Assume that the risk-free rate is 6% and the expected rate ...

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