Capital Asset Pricing Model to Find Expected Return
Not what you're looking for?
1. The expected return on the stock market is 10% with a standard deviation of 27%. The risk-free rate is 3%. AB Corp. has covariance (COV) of 0.075 with the market return. The stock currently trades at $100 and is expected to increase to $114. What is the required return on the stock?
Purchase this Solution
Solution Summary
The solution describes the Capital Asset Pricing Model and how to apply it to obtain the answer to this question.
Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.