Suppose the risk-free return is 6.3% and the market portfolio has an expected return of 11.5% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.72. What is its expected return? The expected return is __ % ? (Round to two decimal places.)
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Suppose the risk-free return is 6.3% and the market portfolio has an expected return of 11.5% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.72. What is its expected return?
The expected return is __ % ? (Round to two decimal places.)
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- You have observed the following returns over time: Assume that the risk-free rate is 6% and the market risk premium is 5%. What are the betas of Stocks X and Y? What are the required rates of return on Stocks X and Y? What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y?An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 3.2%, and the return on the HML portfolio (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = 20.4, and di = 1.3, what is the stock’s predicted return?Suppose the risk-free return is 4.6% and the market portfolio has an expected return of 11.1% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.73. What is its expected return? The expected return is %. (Round to two decimal places.)
- Assume that the risk-free rate is 6.5% and the required return on the market is 8%. What is the required rate of return on a stock with a beta of 0.6? Round your answer to two decimal places.Suppose risk-free rate of return = 2%, market return = 7%, and Stock B’s return = 11%. a. Calculate Stock B’s beta. b. If Stock B’s beta were 0.80, what would be its new rate of return?Suppose Stock A has B = 1 and an expected return of 11%. Stock B has a B = 1.5. The risk- free rate is 5%. Also consider that the covariance between B and the market is 0.135. Assume the CAPM is true. Answer the following questions: a) Calculate the expected return on share B. b) Find the equation of the Capital Market Line (CML). c) Build a portfolio Q with B = 0 using actions A and B. Indicate weights (interpret your result) and expected return of portfolio Q.
- Assume the expected return on the market is 9 percent and the risk-free rate is 4 percent. What is the expected return for a stock with a beta equal to 1.80? (Round answers to 2 decimal places, e.g. 15.25.) What is the market risk premium? (Round answers to 2 decimal places, e.g. 15.25.)Suppose the risk-free return is 3.7% and the market portfolio has an expected return of 8.8% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.73. What is its expected return (Round to 2 decimal places)Suppose the risk-free return is 3.5% and the market portfolio has an expected return of 11.9% and a volatility of 12.9% Merck & Co. (Ticker: MRK) stock has a 20.8% volatility and a correlation with the market of 0.065. a. What is Merck's beta with respect to the market? b. Under the CAPM assumptions, what is its expected return?
- Suppose the risk-free return is 5.3% and the market portfolio has an expected return of 10.2% and a standard deviation of 16%. Loblaw Companies Limited stock has a beta of 0.32. What is its expected return? The expected return is%. (Enter your response as a percent rounded to two decimal places.)*Stock A has a beta of 1.3 and an expected return of 10.2. Stock B has a beta of 0.8 and an expected return of 8.7. If these stocks are priced correctly according to the CAPM, what is the risk-free rate? Give your answer in percentage to the nearest basis point.Suppose the market risk premium is 9 % and also that the standard deviation of returns on the market portfolio is 0.26 . Further assume that the correlation between the returns on ABX (Barrick Gold) stock and returns on the market portfolio is 0.62 , while the standard deviation of returns on ABX stock is 0.36 . Finally assume that the risk-free rate is 2 %. Under the CAPM, what is the expected return on ABX stock? (write this number as a decimal and not as a percentage, e.g. 0.11 not 11%. Round your answer to three decimal places. For example 1.23450 or 1.23463 will be rounded to 1.235 while 1.23448 will be rounded to 1.234)