Purchase Solution

Expected return

Not what you're looking for?

Ask Custom Question

In an efficient market, a group of high growth stocks is expected to provide a higher expected return than a group of low growth stocks. Is this true or false?

Purchase this Solution
Solution Summary

Solution provided to understand market efficiency. The low growth stocks are analyzed.

Solution Preview

It is a very tricky question.

The statement is false. The discounting rate for a high growth stock is higher than the low growth stock and given the same ...

Solution provided by:
Ashish Sharma, MBA (IP)
Education
  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
Recent Feedback
  • "Thank You so much! "
  • "Always provide great help, I highly recommend Mr. Sharma over others, thanks again. "
  • "great job. I will need another help from you. "
  • "first class!"
  • "Thank you for your great notes. Will you be willing to help me with one more assignment? "
Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

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.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • 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

    expected annual return on stock 2 = 10% expected annual return on stock 3 = has to be calculated expected annual return on portfolio = 12% Expected return on portfolio = proportion

  • Finance : Expected Return and Risk

    (Expected portfolio return) Musumeci Capital Management has invested its portfolio as shown here. What is Musumeci's expected portfolio return?

  • 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?

  • Expected Return

    Risk free rate = 6% Beta = 1.25 Expected return on the market = 13% Expected Return using the CAPM equation is Expected return = Risk free rate + (Expected Return on Market-Risk free rate) X beta Expected Return = Rf + (Rm-Rf) X beta Expected

  • Answer to "expected return" question

    The new expected return is Expected Return = 4% + (14.7%-4.9%) X 1.3 Expected Return = 16.74% The solution explains how to calculate the expected return using the CAPM equation

  • expected excess return

    B, it offers an expected excess return of 1.8% 4. B, it offers an expected return of 2,4% 5.

  • Expected rate of return on the portfolio

    expected total return can be calculated as Expected rate of return = Sum (Probability X Return) Expected rate of return = 0.1 X 15% + 0.85 X 12.67% + 0.05 X -2.33% Expected rate of return = 12.15% The solution explains how to calculate the expected

  • Expected Return and Beta Risk

    113625 Expected return / beta 17. The expected return on the market is 13% and the risk-free rate is 5%. Your portfolio has a beta of 1.3. What is the expected return on your portfolio? 18. What is the beta of the following portfolio?

  • Calculating the expected returns

    Calculate the expected return from Dell. b. Find the highest expected return that is offered by one of these stocks. c. Find the lowest expected return that is offered by one of these stocks. d.

View More Related Solutions