This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Given an expected market return of 12.0, a beta of 0.75 for Benson Industries, and a risk-free rate ... (Read 325 times)

wenmo

  • Hero Member
  • *****
  • Posts: 540
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


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Harbringer

  • Sr. Member
  • ****
  • Posts: 329
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

  • Member
  • Posts: 540
Reply 2 on: Jul 10, 2018
Thanks for the timely response, appreciate it

alvinum

  • Member
  • Posts: 317
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

It is believed that the Incas used anesthesia. Evidence supports the theory that shamans chewed cocoa leaves and drilled holes into the heads of patients (letting evil spirits escape), spitting into the wounds they made. The mixture of cocaine, saliva, and resin numbed the site enough to allow hours of drilling.

Did you know?

The first oral chemotherapy drug for colon cancer was approved by FDA in 2001.

Did you know?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

Did you know?

The U.S. Pharmacopeia Medication Errors Reporting Program states that approximately 50% of all medication errors involve insulin.

Did you know?

The types of cancer that alpha interferons are used to treat include hairy cell leukemia, melanoma, follicular non-Hodgkin's lymphoma, and AIDS-related Kaposi's sarcoma.

These species are all at risk of extinction. Species with slow life-h These species are all at risk of extinction. Species with slow life-h
Lymphatic vessels (green) pick up excess tissue fluid, purify it in lymph nodes, and return it to th Lymphatic vessels (green) pick up excess tissue fluid, purify it in lymph nodes, and return it to th
Expected and Unexpected Reinforcers Expected and Unexpected Reinforcers
Rate of Growth of Brain Areas Rate of Growth of Brain Areas
Beta-Adrenergic Antagonists Beta-Adrenergic Antagonists
The level of future emissions is closely linked to the rate of population growth The level of future emissions is closely linked to the rate of population growth
Video: Cleavage and Implantation Animation

For a complete list of videos, visit our video library