You have been given an opportunity to invest in a stock. Recent ...

[Evvie72]

You have been given an opportunity to invest in a stock. Recent trends suggest that a one percent rise in the stock market leads to approximately a two and one-half percent rise in the price of this stock.
 
  The real risk-free rate currently stands at 6 and stocks on average have provided 12 returns. Using the capital asset pricing model, determine the appropriate discount rate for the stock in question.

Question 2

Those who engage in the practice of discrimination today are generally quite blatant.
 
  Indicate whether the statement is true or false

[sylvia]

Answer to Question 1

Discount rate = rf + (rm - rf)
 = 2.5
R = 6 + 2.5(12  6 )
R = 6 + 15
= 21

Answer to Question 2

F

[Evvie72]

TYSM

[tandmlomax84]

Excellent