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- K At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was 1.51 and the risk-free rate was about 4.69%. Apple's price was $81.44. Apple's price at the end of 2007 was $190.41. If you estimate the market risk premium to have been 5.59%, did Apple's managers exceed their investors' required return as given by the CAPM? The expected return is %. (Round to two decimal places.)Dhofar Silicon Services has a Beta = 2.42 The risk free rate on a treasury bill is currently 8.2% and the market return has averaged 16%.What is the cost of equity ? O a. All the given answers in this question are not correct O b. 0.46 O c. 0.2708 O d. 0.19 O e. 0.4692 | https://moodle1.du.edu ENG ailo 91% F2 F3 F10 F4 F5 F7 F8 F9 @ %23 24 % & 2 3 4. 6 8. R Y U 10 A S DEFJ GYH1J - K C V BY NiM IS Alt この > 1.Consider the following information: Probability of State of Economy .22 .57 .21 Economy Recession Normal Boom Rate of Return if State Occurs. Stock A Stock B a. Expected return of A Expected return of B b. Standard deviation of A Standard deviation of B .020 .100 160 a. Calculate the expected return for the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. Calculate the standard deviation for the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. % % -.27 .17 .40 % %
- an FIN 320 Pearson Ed At the beginning of 2007 (the yoar the iPhone was introduced). Apple's beta was 1.3 and the risk-free rate was about 36% Apple's price was $82 29 Apple's price at the end of 2007 was 5197.24. If you estimate the market risk promium to have been 5.7%, did Apple's managers exceed their investors' required returm as given by the CAPM? The expected return is (Round to two decimal places)Please answer both QUESTION 5 Which of the following is not a reason why beta may differ between sources: Beta is based on historical values. Beta may be calculated using dfferent periodicities, such as monthly, weekly, or daily. The market benchmark may differ. Beta may be calculated using 3 years of data instead of 5 years of data. QUESTION 6 According to the CAPM, which of the following risks is irrelevant? O A. Market risk • B. All risks are always relevant 0 C. Unsystematic risk • D. Systematic riskConsider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Recession .17 .08 −.12 Normal .58 .11 .17 Boom .25 .16 .34 a. Calculate the expected return for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
- Suppose you observe the following situation: Security Pete Corporation Repete Company Beta 1.70 1.39 a. Expected return on market b. Risk-free rate Expected Return .180 .153 a. Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the risk-free rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % %Consider the following information: State of Economy Recession. Normal Boom Probability of State of Economy .17 .58 .25 Rate of Return if State Occurs Stock A Stock B .08 -.12 11 .17 .34 a. Stock A expected return a. Stock B expected return b. Stock A standard deviation b. Stock B standard deviation a. Calculate the expected return for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) .16 Answer is complete but not entirely correct. 9.86 % 21.46 % 7.70 % 9.50 %You have been given the following information: State of Economy Recession Normal Boom Probability of State of Economy .17 .58 .25 Rate of Return if State Occurs a. Stock A expected return a. Stock B expected return b. Stock A standard deviation b. Stock B standard deviation Stock A .08 .11 16 a. Calculate the expected return for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Stock B -.12 .17 .34 % % % %
- Consider the following information: Probability of State of Economy .20 .60 .20 Economy Recession Normal Boom Rate of Return if State Occurs Stock A Stock B .035 .115 .290 a. Calculate the expected return for the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. Calculate the standard deviation for the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a. Expected return of A Expected return of B b. Standard deviation of A Standard deviation of B do do do do % % % % -.40 .30 .53Consider the following information: Economy Recession Normal Boom Probability of State of Economy .21 .56 .23 Rate of Return if State Occurs Stock A Stock B a. Expected return of A Expected return of B b. Standard deviation of A Standard deviation of B .015 .095 .250 a. Calculate the expected return for the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. -.36 .26 .49 b. Calculate the standard deviation for the two stocks. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. % % %Consider the following information: Rate of Return If State Occurs State of Probability of State of Economy Stock A Economy Stock B Recession .15 .06 - 10 Normal .56 .09 .19 Вoom .29 .14 .36 . Calculate the expected return for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) . Calculate the standard deviation for Stocks A and B. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Stock A expected return % Stock B expected return % Stock A standard deviation % Stock B standard deviation %