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Author Question: Given the following information, determine which beta coefficient for Stock A is consistent with ... (Read 16 times)

karlynnae

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Question 1

Consider the data on expected returns and betas for a variety of assets in the table below. What is the expected return on shares of Bank of America using the SML?

AssetExpected ReturnBeta
Bank of America0.9
Risk Free Asset4%0
Market Portfolio10%1

◦ 5.4%
◦ 6.0%
◦ 8.2%
◦ 9.4%
◦ 11.2%

Question 2

Given the following information, determine which beta coefficient for Stock A is consistent with equilibrium: E(ki) = 8.5%; kF = 4%; E(kM) = 12%.
◦ 0.80
◦ 1.26
◦ 0.56
◦ 1.10
◦ 1.00


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Marked as best answer by karlynnae on Apr 25, 2021

recede

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karlynnae

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


patma1981

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Reply 3 on: Yesterday
:D TYSM

 

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