Adam wants to determine the required return on a stock portfolio with a beta coefficient of 0.5. Assuming the risk-free rate of 6 percent and the market return of 12 percent, compute the required rate of return
What will be an ideal response?
r = RF + b(rm - RF)
= 0.06 + 0.5(0.12 - 0.06 ) = 0.09 = 9%
The company should expect at least 9 percent return on the stock portfolio.
You might also like to view...
Which of the following is an example of a dyadic relationship in an organization ______.
A. mentor and protégé B. supervisor news reporter C. CEO and top management team D. trainer and janitor
Identify the prepositional phrase or prepositional phrases in the sentence. She parked under the overpass until the rain subsided
____ signatures were needed on the loan documents
A) Matt and Maggie's B) Matt's and Maggie's C) Matts' and Maggies'
Daniel, his parents, and three brothers own all the stock of their family farm corporation. This corporation, which is taxed as a corporation, is probably:
a. an S corporation. b. a C corporation. c. a closely held corporation. d. an LLC.