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Author Question: Given an expected market return of 12.0, a beta of 0.75 for Benson Industries, and a risk-free rate ... (Read 334 times)

wenmo

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on: Jul 10, 2018
Given an expected market return of 12.0, a beta of 0.75 for Benson Industries, and a risk-free rate of 4.0, what is the expected return for Benson Industries?
 
  A) 13.0
  B) 10.0
  C) 9.0
  D) 4.0

Question 2

The Security Market Line has ________.
 
  A) a positive slope
  B) a negative slope
  C) no slope
  D) a beta of 1.0


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Harbringer

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: B
Explanation: B) The equation for the SML is E(ri) = rf + (rf + E(rm) - rf  i)
= 4.00 + 0.75  (12.00 - 4.00) = 10.00.

Answer to Question 2

Answer: A


wenmo

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Reply 2 on: Jul 10, 2018
Thanks for the timely response, appreciate it

komodo7

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  • Posts: 322
Reply 3 on: Yesterday
Great answer, keep it coming :)

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