Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 12% volatility and the risk-free rate is 3%. New news arrives that does not change any of these numbers, but it does change the expected returns of the following stocks: Stock Expected Return Volatility Beta
Taggart Transcontinental 8% 28% 1.2
Rearden Metal 13% 40% 1.7
Wyatt Oil 7% 20% 0.8
Nielson Motors 10% 32% 1.3
The expected alpha for Taggart Transcontinental is closest to:
A) -3%
B) -1%
C) 1%
D) 3%
E) 0%

b. -1%

Explanation:

Expected Alpha = E[rs] - [rf+ B(rm- rf)]. Where rf+ B(rm- rf) is the CAPM return, rf= risk free return, B = Beta of security, rm= return of market, E[rs]= Expected return of security

Expected Alpha = 8% - [3%+1.2*(8%-3%)

Expected Alpha = 8% - 9%

Expected Alpha = -1%

So, the expected alpha for Taggart Transcontinental is closest to -1%.

i believe the answer is: streets and roads

public property refers to the property that can be used by all legal citizens in a certain country. the public property was created and maintain using the government budget that allocated specifically for it. the budget itself come from the citizen's income tax payment.

answer; blank(1); autonomous; blank(2) a wlan controller-based architecture;