位置1的问题 The common stock of Xiang Estates has an expected return of 13.3 percent. The expected return on the market is 10 percent, the inflation rate is 1.4 percent, and the risk-free rate of return is 1.3 percent. What is the beta of this stock?1.381.551.331.411.23清除选择

Question

BlackTom AI · Accepted Answer

We start by identifying the formula that links expected stock return, risk-free rate, market return, and beta. According to the CAPM (Capital Asset Pricing Model), E[R_i] = R_f + β_i × (E[R_m] − R_f).

Option-by-option analysis:

Option A: 1.38
- This value yields a close match to the given data. Compute beta: β = (E[R_i] − R_f) / (E[R_m] − R_f) = (0.133 − 0.013) / (0.10 − 0.013) = 0.120 / 0.087 ≈ 1.3793, which rounds to 1.38. Therefore this option is consistent with CAPM using the provided numbers.

Option B: 1.55
- If beta were 1.55, the expected return would be E[R_i] = R_f + β × (E[R_m] − R_f) = 0.013 + 1.55 × (0.10 − 0.013) = 0.013 + 1.55 × 0.087 ≈ 0.013 + 0.13485 ≈ 0.14785, or 14.785%. This is noticeably higher than the given 13.3%, so this beta overstates the stock’s sensitivity.

Option C: 1.33
- With β = 1.33, E[R_i] = 0.013 + 1.33 × 0.087 ≈ 0.013 + 0.11571 ≈ 0.12871, or 12.871%. This is lower than the provided 13.3%, so this beta underestimates the stock’s return relative to the CAPM expectation.

Option D: 1.41
- For β = 1.41, E[R_i] = 0.013 + 1.41 × 0.087 ≈ 0.013 + 0.12267 ≈ 0.13567, or 13.567%. This is higher than 13.3%, so it implies a larger beta than the correct value.

Option E: 1.23
- If β = 1.23, E[R_i] = 0.013 + 1.23 × 0.087 ≈ 0.013 + 0.107 (approximately) ≈ 0.12, or 12.0%. This is well below the given 13.3%, indicating a much weaker (smaller) beta than the actual.

Summary: Only option A yields a beta that aligns with the provided expected return using the CAPM relationship. The remaining options produce expected returns that are either too high or too low relative to 13.3% given the market and risk-free inputs.

位置1的问题 The common stock of Xiang Estates has an expected return of 13.3 percent. The expected return on the market is 10 percent, the inflation rate is 1.4 percent, and the risk-free rate of return is 1.3 percent. What is the beta of this stock?1.381.551.331.411.23清除选择

查看解析

登录即可查看完整答案

类似问题

位置5的问题 The common stock of Xiang Estates has an expected return of 13.3 percent. The expected return on the market is 10 percent, the inflation rate is 1.4 percent, and the risk-free rate of return is 1.3 percent. What is the beta of this stock?1.331.411.551.231.38清除选择

The risk-free rate is 2% and the expected return on the market portfolio is 11%. If the CAPM holds, what is the beta on stock YMH with an expected return of 13.7%?

The risk-free rate is 1.5% and the expected return on the market portfolio is 9%. If the CAPM holds, what is the beta on stock YMH with an expected return of 9.68%?

BJB, Inc. stock has an expected return of 15.15 percent. The risk-free rate is 3.8 percent and the market risk premium is 8.6 percent. What is the stock's beta?

The common stock of Flavorful Teas has an expected return of 21.42 percent. The return on the market is 15 percent and the risk-free rate of return is 4.3 percent. What is the beta of this stock?

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单