Business, 02.07.2020 18:01 nathang444

A stock with a beta of 2.0 has an expected rate of return of 21%. If the market return this year turns out to be 8 percentage points below expectations, what is your best guess as to the rate of return on the stock

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Answer from: GreenHerbz206

The answer is 5%

Explanation:

Solution

Given that:

A stock with a beta =2.0

The expected rate of return =21%

Market return turnout = 8%

Now,

Rf = risk free return

Rp = risk premium =Rm -Rf

β = 2.0

Thus

The expected return R = Rf +β *Rp

= Rf +β * (Rm -Rf)

R = Rf +2.0 (Rm -Rf)

=Rf + 2 times risk premium

So,

The market turns by 8%

R = Rf +2.0 (Rm -8%-Rf)

=Rf + 2 Rm-16%-2Rf

Then

The expected return is reduced by 16%

Hence,

21% -16% =5%

Therefore the expected rate of return on the stock is 5%

Answer from: Quest

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Answer from: Quest

Via: "if you are found to be supplying or dealing drugs, the punishment is likely to be tough. supplying drugs doesn’t just apply to dealers. if police suspect that you intend to share drugs with your friends, this is still considered to be supplying.

being suspected of supplying drugs means you are much more likely to be charged. the amount of drugs found on you, and whether you have a criminal record, will be taken into account when a punishment is being decided.

decisions to prosecute are taken by the public prosecution service. the maximum sentences for intent to supply drugs are:

- up to life in prison or an unlimited fine (or both) for a class a drug- up to 14 years in prison or an unlimited fine (or both) for a class b or class c drug."sorry if this was a school question, you didnt supply options so i assumed it was a personal question, which if it is, reconsider selling or having possesion of any drugs at all. i wish you the best!

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A stock with a beta of 2.0 has an expected rate of return of 21%. If the market return this year tur...

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