Consider the following multifactor (APT) model of security returns for a particular stock.
Factor Factor Beta Factor Risk Premium
Inflation 1.6 6%
Industrial production 1.1 7
Oil prices 0.7 2
a.
If T-bills currently offer a 5% yield, find the expected rate of return on this stock if the market views the stock as fairly priced. (Do not round intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.)
Expected rate of return %
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Consider the following multifactor (APT) model of security returns for a particular stock. Factor Factor Beta Factor Risk Premium Inflation ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Hiring qualified personnel, segregating employee duties, and controlling physical access to assets and information are examples of what kind of internal controls? A. Preventive controls. B. Detective controls. C. General controls. D.
Answers (1)
Morse and Cremona Inc. continually monitors the workers' compensation expenditures they incur and takes several precautionary measures to ensure that the compensation claims filed are not fraudulent.
Answers (1)
Tunney Industries can issue perpetual preferred stock at a price of $47.50 a share. The stock would pay a constant annual dividend of $3.80 a share. What is the company's cost of preferred stock Rp?
Answers (1)
Landon Jewelers uses the perpetual inventory system. On April 2, Landon sold merchandise with a cost of $ 3 comma 500 for $ 7 comma 000 to a customer on account with terms of 1 /15, n/30.
Answers (1)
As employment of labor increases, the marginal product of labor will eventually decrease because:
Answers (1)
New Questions in Business
Your business uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for uncollectible accounts had a credit balance of $ 1 comma 000.
Answers (1)
Suppose you have a choice of working full-time during the summer or attending summer school full-time. Summer tuition and books are $3,000. If you worked, you could make $5,000. Your rent is $1,000 for summer, regardless of your choice.
Answers (1)
Which phrase defines complementary goods
Answers (1)
If a company's current assets increase, what might we assume about their inventory levels? a) It increasedb) It decreasedc) It stayed the samed) We don't have enough information to decide
Answers (1)
What is the effect of import restrictions on prices? a. they cause prices to drop. b. they cause prices to rise. c. they often cause prices to rise steeply and then drop. d. they usually do not have any lasting effect on price?
Answers (1)