Question

Suppose the​ risk-free return is 7.8% and the market portfolio has an expected return of 8.4%...

Suppose the​ risk-free return is 7.8% and the market portfolio has an expected return of 8.4% and a standard deviation of 16%. Johnson​ & Johnson Corporation stock has a beta of 0.32.

What is its expected​ return? The expected return is?

​(Round to two decimal​ places.)

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Expected return (0) Rf+BxRp Here, Risk free rate of return (RF) Beta of the stock (B) Market risk premium (Rp) 7.8% 0.32 8.4%

*Please rate thumbs up

Add a comment
Know the answer?
Add Answer to:
Suppose the​ risk-free return is 7.8% and the market portfolio has an expected return of 8.4%...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Suppose the​ risk-free return is 3.9% and the market portfolio has an expected return of 11.9%...

    Suppose the​ risk-free return is 3.9% and the market portfolio has an expected return of 11.9% and a standard deviation of 16%. Johnson​ & Johnson Corporation stock has a beta of 0.32. What is its expected​ return? (round to 2 decimal places)

  • P 12-28 (book/static) Suppose the risk-free return is 4.0% and the market portfolio has an expected...

    P 12-28 (book/static) Suppose the risk-free return is 4.0% and the market portfolio has an expected return of 10.0% and a standard deviation of 16%, Johnson & Johnson Corporation stock has a beta of 0.32 what is its expected return? The expected return i%. (Round to two decimal places.)

  • Suppose the risk-free return is 7.6% and the market portfolio has an expected return of 8.2%...

    Suppose the risk-free return is 7.6% and the market portfolio has an expected return of 8.2% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.29. What is its expected return? The expected return is %. (Round to two decimal places.)

  • Suppose the​ risk-free return is 5.6% and the market portfolio has an expected return of 11.9%...

    Suppose the​ risk-free return is 5.6% and the market portfolio has an expected return of 11.9% and a standard deviation of 16%. Johnson​ & Johnson Corporation stock has a beta of 0.33. What is its expected​ return? The expected return is? (Round to two decimal​ places.)

  • Problem 11-28 Question Help Suppose the risk-free return is 4.9% and the market portfolio has an...

    Problem 11-28 Question Help Suppose the risk-free return is 4.9% and the market portfolio has an expected return of 10.9% and a standard deviation of 16%. Loblaw Companies Limited stock has a beta of 0.29. What is its expected return? The expected return is %. (Enter your response as a percent rounded to two decimal places.)

  • A portfolio that combines the risk-free asset and the market portfolio has an expected return of...

    A portfolio that combines the risk-free asset and the market portfolio has an expected return of 7.7 percent and a standard deviation of 10.7 percent. The risk-free rate is 4.7 percent, and the expected return on the market portfolio is 12.7 percent. Assume the capital asset pricing model holds. What expected rate of return would a security earn if it had a .52 correlation with the market portfolio and a standard deviation of 55.7 percent? (Do not round intermediate calculations....

  • A portfolio that combines the risk-free asset and the market portfolio has an expected return of...

    A portfolio that combines the risk-free asset and the market portfolio has an expected return of 9 percent and a standard deviation of 16 percent. The risk-free rate is 4.1 percent and the expected return on the market portfolio is 11 percent. Assume the capital asset pricing model holds. What expected rate of return would a security earn if it had a .38 correlation with the market portfolio and a standard deviation of 60 percent?

  • The risk-free rate of return is 5%, the expected rate of return on the market portfolio...

    The risk-free rate of return is 5%, the expected rate of return on the market portfolio is 16%, and the stock of Xyrong Corporation has a beta coefficient of 1.4. Xyrong pa Dividends were just paid and are expected to be paid annually. You expect that Xyrong will earn an ROE of 25% per year on al reinvested earnings forever. ys out 60% of its earnings in dividends, and the latest earnings announced were $700 per share. a. What is...

  • The risk-free rate of return is 5%, the expected rate of return on the market portfolio...

    The risk-free rate of return is 5%, the expected rate of return on the market portfolio is 16%, and the stock of Xyrong Corporation has a beta coefficient of 1.4. Xyrong pays out 60% of its earnings in dividends, and the latest earnings announced were $7.00 per share. Dividends were just paid and are expected to be paid annually. You expect that Xyrong will earn an ROE of 25% per year on all reinvested earnings forever. a. What is the...

  • Suppose the risk-free rate is 4.3 percent and the market portfolio has an expected return of...

    Suppose the risk-free rate is 4.3 percent and the market portfolio has an expected return of 11 percent. The market portfolio has a variance of .0392. Portfolio Z has a correlation coefficient with the market of .29 and a variance of .3295 According to the capital asset pricing model, what is the expected return on Portfolio Z? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT