位置8的问题 The stock of Yakir Development has a beta of 1.31. The risk-free rate of return is 1.5 percent and the market rate of return is 8 percent. What is the risk premium on this stock?8.5%5.0%6.5%.9%6.7%清除选择

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BlackTom AI · Accepted Answer

The question asks for the risk premium on Yakir Development stock given beta = 1.31, risk-free rate rf = 1.5% and market return rm = 8%.

First, recall the CAPM framework: the stock's expected return equals rf plus the stock's beta times the market risk premium, where the market risk premium is rm − rf. The stock's risk premium (beta times market premium) is beta × (rm − rf).

Compute the market risk premium: rm − rf = 8.0% − 1.5% = 6.5%.

Next, multiply by the stock’s beta: 1.31 × 6.5% = 8.515%. This rounds to approximately 8.5% when expressing the result to one decimal place.

Now evaluate each option:
- 8.5%: This aligns with the calculation 1.31 × 6.5% ≈ 8.515%, so it is the correct risk premium estimate after rounding.
- 5.0%: This would correspond to a much smaller premium, implying either a lower beta or a smaller market premium. Neither matches the given beta and market premium, so this is incorrect.
- 6.5%: This equals the raw market risk premium (rm − rf) themselves, not the beta-adjusted premium. Since the stock has beta > 1, the correct risk premium should exceed 6.5%, so this is incorrect.
- .9% (likely a misprint for 0.9%): This is far too small to reflect the beta-adjusted premium and misrepresents the inputs entirely, so it is incorrect.
- 6.7%: This is close to the raw market premium, but it does not incorporate the beta effect. With beta = 1.31, the premium should be noticeably larger than 6.5%, making 6.7% an underestimation. This is incorrect.

In summary, the correct approach yields a risk premium of about 8.515%, which is typically rounded to 8.5% for presentation. The other options fail to reflect the multiplication of beta by the market risk premium or misinterpret the required calculation.

位置8的问题 The stock of Yakir Development has a beta of 1.31. The risk-free rate of return is 1.5 percent and the market rate of return is 8 percent. What is the risk premium on this stock?8.5%5.0%6.5%.9%6.7%清除选择

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