Security A is less risky if held in a diversified portfolio because of its negative correlation with other stocks. In a
single-asset portfolio, Security A would be more risky because sA> sBand CVA > CVB.
49%....in reality no stock has a beta of 7
The rate of return on the stock is dependent on the public's appraisal of the current economic situation and of the company. However, on the long term it is dependent on the management's efforts.
5
tomato 6.33
7 1/8 as a percent = 712.5% % rate: = 7 1/8 * 100% = (7 + 0.125) * 100% = 7.125 * 100% = 712.5%
E (return) = Rf + Beta[Rm - Rf] = 6 + (7) (13-6) = 55 %
In the late 1990s, sales to Canada represented 20 percent of the market; 15 percent for Mexico; 11 percent to the Dominican Republic; and 7 percent to Japan. Exports were expected to increase 6 percent annually through 2002.
7 percent is 7 percent. 7 percent of 35,000 is 2450.
The answers are 7%, 7.33%.
If the required rate of return is 11 the risk free rate is 7 and the market risk premium is 4 If the market risk premium increased to 6 percent what would happen to the stocks required rate of return?
7 percent of 7 percent = 49/10000 or 0.00497% of 7%= 7/100 * 7/100= 49/10000= 0.0049
In year 7 the expected levles are level 5 and over.