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Author Question: Analysts state that the required return from Plummet Soft Drinks stock is 25%, and the returns from ... (Read 78 times)

naturalchemist

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Question 1

Altria Group Inc. (ticker: MO on NYSE) is an American manufacturer of tobacco products. Selected Financial information for Altria is provided in the table below. What is the expected return on shares of Altria using the SML?

AssetExpected ReturnBeta
Altria0.5
Risk Free Asset5%0
Market Portfolio10%1

◦ 5.0%
◦ 7.5%
◦ 10.0%
◦ 12.5%
◦ 15%

Question 2

Analysts state that the required return from Plummet Soft Drinks stock is 25%, and the returns from Treasury bills and the market portfolio are 4% and 20%, respectively. What is Plummet's beta?
◦ 0.79
◦ 1.00
◦ 0.05
◦ 1.31
◦ 1.13


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Marked as best answer by naturalchemist on Apr 25, 2021

wuly

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naturalchemist

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Reply 2 on: Apr 25, 2021
Thanks for the timely response, appreciate it


kswal303

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Reply 3 on: Yesterday
Excellent

 

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