Assume the following data: Risk-free rate = 4.0 percent; average risk premium = 7.7 percent. Calculate the required rate of return for the risky asset.
A: 5.6 percent
B: 7.6 percent
C: 11.7 percent
D: 30.8 percent
A: 5.6 percent
B: 7.6 percent
C: 11.7 percent
D: 30.8 percent
举一反三
- If the average annual rate of return for common stocks is 11.7 percent, and 4.0 percent for U.S. Treasury bills, what is the average market risk premium? A: 15.7 percent B: 4.0 percent C: 7.7 percent D: Not enough information is provided.
- Given Gitech's beta of 1.55 and a risk free rate of 8 percent, what is the expected rate of return assuming a 14 percent market return? A: 12.4% B: 14.3% C: 17.3% D: 20.4%
- In which of the following situations would you prefer to be making a loan? A: The interest rate is 9 percent and the expected inflation rate is 7 percent. B: The interest rate is 4 percent and the expected inflation rate is 1 percent. C: The interest rate is 13 percent and the expected inflation rate is 15 percent. D: The interest rate is 25 percent and the expected inflation rate is 50 percent.
- If the nominal interest rate per year is 10 percent and the inflation rate is 4 percent, what is the real rate of interest? A: 10.0 percent B: 4.1 percent C: 5.8 percent D: 14.0 percent
- One year ago, you invested $1,800. Today it is worth $1,924.62. What rate of interest did you earn? A: 6.59 percent B: 6.67 percent C: 6.88 percent D: 6.92 percent E: 7.01 percent