Questions from Corporate Finance

Q: Data on the daily performance of Carraway Corporation have been partially completed

Data on the daily performance of Carraway Corporation have been partially completed in the following table. Fill in the missing data. The closing price on one day is assumed to be the opening price fo...

Q: Determine the beta of QTax based on the following information:

Determine the beta of QTax based on the following information: • Market expected return is 9 percent; standard deviation is 12 percent • R isk‐free rate is 3 percent • Current dividend is $4 • Dividen...

Q: Assuming CAPM is valid, can we have a situation where stock

Assuming CAPM is valid, can we have a situation where stock A has a required rate of return of 15 percent and a beta of 1.4, and stock B has a required rate of return of 20 percent and beta of 1.2?

Q: Stock A has a beta of 1.8 and an expected

Stock A has a beta of 1.8 and an expected return of 20 percent. Stock B has a beta of 1.2 and an expected return of 14 percent. If CAPM holds, what should the return on the market and the risk‐free ra...

Q: The expected return on stock A is 15 percent. The expected

The expected return on stock A is 15 percent. The expected return on stock B is 9 percent. Assuming CAPM holds, if the beta of stock A is higher than the beta of stock B by 0.4, what should the risk p...

Q: The variance of the market returns is 0.0576, and

The variance of the market returns is 0.0576, and the covariance of the returns on ABC stock and the market is 0.09504. If the risk‐free rate is 5 percent and the market risk premium is 8 percent, wha...

Q: You invested $100,000 in the following stocks:

You invested $100,000 in the following stocks: If the risk‐free rate is 5 percent and the market risk premium is 8 percent, what is the expected return on your portfolio?

Q: Four risk factors, F 1 , F 2 , F 3

Four risk factors, F 1 , F 2 , F 3 , and F 4 , have been identified to determine the required rate of return, as follows: ERi a0 bi1 F1 bi2 F2 bi3 F3 bi4 F4, where a0 , is the expected return on a sec...

Q: 1. What is the expected return and standard deviation of a

1. What is the expected return and standard deviation of a portfolio consisting of $7,500 invested in a risk free asset with an 8‐percent rate of return, and $2,500 invested in a risky security with a...

Q: When is the expected return equal to the required return?

When is the expected return equal to the required return?