ellbellzzz8404 ellbellzzz8404
  • 04-03-2020
  • Computers and Technology
contestada

Suppose the beta of Microsoft is 1.13, the risk-free rate is 3 percent, and the market risk premium is 8 percent. Calculate the expected return for Microsoft.

Respuesta :

FreshPrinxce
FreshPrinxce FreshPrinxce
  • 09-03-2020

Answer:

8.65%

Explanation:

Rj = Rf + risk premium.

Rj = Rf + β[E(RM − Rf)].

= 3 + 1.13 (8 - 3)

= 3 + 1.13 x 5

= 3 + 5.65

= 8.65 percent

This relationship between risk and expected return is called the security market line.

Answer Link

Otras preguntas

How do you divide. Please help I can't remember.
Why was Emmeline Pankhurst significant?
what are the steps to evaporation but without heat just evaporation steps to follow
Compare and contrast an electromagnet and a permanent magnet.
Tickets to a play cost $5 for adults and $2 for children. If 1,750 tickets were sold for a total of $7,100, how many children’s tickets were sold? Can someone e
How do figure out 120/f = 1.2?
A box if cereal has a volume of 384 cubic inches . If width of the box is 4 inches and the length is 8 inches , what is the height of the box?
State whether the following is an example of inductive reasoning or deductive reasoning You have a summer job as a mechanic’s helper. The mechanic asks you loos
3x-150=1778. Help me please I need help bad
BY using eight eights  and addition only can you make 1000?????/