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.

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

Cost of Debt, Required Return, and WACC. See the attached file. ... What required return should Tom use in evaluation of business opportunity being considered ? ...

Required Return, Profitability Index, and NPV. Chapter 7 Practice Problems 16 & 25. 16. ... Should this project be accepted if the required return is 12 percent? ...

... Stock Beta Required rate of return X 1.20 13.64% Y 2.05 19.76% Z 1.65 16.88%. What are the estimated rates of return for the three stocks? Estimated Returns = ( ...

... Assume that the market risk premium is 5%. What is the expected return on the market? Now use the SML equation to calculate the two companies required returns. ...

... A. Use the capital asset pricing model (CAPM) to determine the required return on Giant't stock. ... A decrease in beta will reduce the required return. ...

... Y ear Returns Expected return Deviation 2002 9% 8% 0.01 ... a security which pays a 10 percent annual rate of return. ... How much additional will he either need or have ...

... o Investors can expect returns from their investment according to the risk. ... Kj = Required return on common stock Rf = Risk-free rate of return; usually the ...