If the expected return on the market is 10.19 percent, the inflation rate is 1.11 percent, the risk-free rate is 2.10 percent, and Big Madden common stock has abeta of 2.36, then what is the expected return for Big Madden stock?20.08% (plus or minus 4 bps)23.53% (plus or minus 4 bps)19.09% (plus or minus 4 bps)21.19% (plus or minus 4 bps)None of the above is within 4 bps of the correct answer

Option d: This option is correct. Step 1:We have to calculate the expected return of the stock.The…

Answered: If the expected return on the market is…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 14P

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Now assume that the stock is currently selling at $30.29. What is its expected rate of return?
What is the risk premium for stock A if its expected real return is 7.16%, the expected inflation rate is 4.31%, and the risk-free return is 5.28%? 2.85% (plus or minus 4 bps) 11.78% (plus or minus 4 bps) 6.50% (plus or minus 4 bps) 1.88% (plus or minus 4 bps) None of the above is within 4 bps of the correct answer
If the expected return on the market is 9.38 percent, the inflation rate is 0.63 percent, the risk - free rate is 2.95 percent, and Big Madden common stock has a beta of 1.06, then what is the expected return for Big Madden stock?
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suppose the common stock of United Industries has a beta of 1.19 and an expected return of 11.8 percent. The risk-free rate of return is 3.5 percent while the inflation rate is 2.6 percent. What is the expected market risk premium? round to 2 decimal places,
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The risk-free rate of return is 2.5 percent, the inflation rate is 3.1 percent, and the market risk premium is 5.3 percent. What is the expected rate of return on a stock with a beta of 1.00? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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