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forsale [732]
3 years ago
15

According to the CAPM, what is the expected market return given an expected return on a security of 12.5%, a stock beta of 1.9,

and a risk-free interest rate of 3%?
Business
1 answer:
marusya05 [52]3 years ago
8 0

Answer:

5%

Explanation:

The security is 12.5%

The stock beta is 1.9

The risk free interest rate is 3%

Therefore the expected market return can be calculated as follows

12.5= 3 + 1.9×Market return

12.5= 3 + 1.9market return

12.5-3= 1.9market return

9.5= 1.9market return

market return= 9.5/1.9

= 5%

Hence the expected market return is 5%

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Abstract

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5 0
4 years ago
The production possibilities model illustrates an inverse relationship between two goods or services because
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Answer:

production of different types will compete for limited resources.

Explanation:

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6 0
3 years ago
Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 4.70% per year. What is
mixas84 [53]

Answer:

2.30%

Explanation:

Data has given as:

Yield for 1 year T-bill = 7.00%

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Risk-free Rate of return = 1 year T-bill yield - inflation

Risk-free Rate of return = 7.00% - 4.70%

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4 years ago
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Which of the following has a very low success rate in the market?
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Success rate is when at rate is bigger than the other

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