Author Question: The equilibrium expected return on an asset is 14%, the risk-free rate is 4% and the return on the ... (Read 89 times)

V@ndy87 · **on:** Apr 25, 2021

Question 1

The company that prints unemployment insurance checks is named Countercyclical Printing, Inc. Countercyclical Printing's beta is -0.75, the risk free rate is 8%, and the risk premium on the market is 7%. What is the equilibrium expected rate of return on Countercyclical Printing's stock?
◦ -8.75%
◦ -3.25%
◦ 2.75%
◦ 4.50%
◦ 5.25%

Question 2

The equilibrium expected return on an asset is 14%, the risk-free rate is 4% and the return on the market portfolio is 12%. What is the beta of the asset?
◦ 1.10
◦ 1.15
◦ 1.20
◦ 1.25
◦ 1.30

kristenb95 · **Reply #1 on:** Apr 25, 2021

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