8-1 EXPECTED RETURN A stock's returns have the following distribution:

Calculate the stock's expected return, standard deviation, and coefficient of variation.

8-3 REQUIRED RATE OF RETURN Assume that the risk-free rate is 6% and the expected return on the market is 13%. What is the required rate of return on a stock with a beta of 0.7?

8-5 BETA AND REQUIRED RATE OF RETURN A stock has a required return of 11%, the risk-free rate is 7%, and the market risk premium is 4%.
a. What is the stock's beta?
b. If the market risk premium increased to 6%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged.

8-7 PORTFOLIO REQUIRED RETURN Suppose you are the money manager of a $4 million investment fund. The fund consists of four stocks with the following investments and betas:

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

8-11 CAPM AND REQUIRED RETURN Calculate the required rate of return for Manning Enterprises assuming that investors expect a 3.5% rate of inflation in the future. The real risk-free rate is 2.5%, and the market risk premium is 6.5%. Manning has a beta of 1.7, and its realized rate of return has averaged 13.5% over the past 5 years.

... of the following three companies have been included in the portfolio: Required Return in Accordance with Systematic Risk Standard Deviation of Returns Beta. ...

... A) Portfolio diversification reduces the variability of the returns on the individual ... C) The required return on a firm's common stock is determined by its ...

... The required rate of return on the stock is 15 percent when the required return on an average stock is 10 percent. ... Step 2:Calculate the required return. ...

... If ZYX stock currently sells for $84 per share, what is the required return? ... Solution to second problem calculates the required return in case of a stock. ...

... there is ONLY ONE expected/required rate of return for a given risk level within the efficient capital market. Any differential in returns for comparable ...

... If you sold your Information Returns and the Instructions for ... may be required to file Form 8938, file it at ... under the grantor trust rules, you are also return. ...

... reinvestment elsewhere. The company's required rate of return is 14%. ... reinvestment elsewhere. The company's required rate of return is 14%. ...

... One could also construct a scatter diagram of returns on the stock versus ... a beta of 1.0, then, at least in theory, its required rate of return would be ...

... The price of the preferred stock, if the required return = 8%, is: a. $ 52 b. $ 65 c. $ 81.25 d. $325. ... The required return on common stock (Ke) is 13.2%. ...

... This shows that the company assets are returned well in ... averse and who is interested in the quick returns he. ... CAPM) is used to define the required return on a ...