Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

Assume that the risk-free rate is 5% and that the rate of return on a balanced portfolio of common stocks is 9%.?

If a firm has a beta coefficient of2, then its risk premium is :

 a.18% 

 b.10% 

 c.8% 

 d.4% 

user-image
Question added by Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company
Date Posted: 2015/08/05
Mohammed Asim Nehal
by Mohammed Asim Nehal , M Asim Nehal & Co , Chartered Accountants

 It is8%.......................c) is the correct option.

Emad Mohammed said abdalla
by Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company

  1. The correct answer was: c.8%.

Yaqoub Alomar
by Yaqoub Alomar , Civil Engineer , Al-Zubeir municipality

Thanks for the invitation,

I agree with the experts 

Vinod Jetley
by Vinod Jetley , Assistant General Manager , State Bank of India

If a stock's beta is1.2, it's theoretically20% more volatile than the market.

So, the correct answer is (9-5)*2=8%

Ismael Hamad
by Ismael Hamad , Trainer , ANTONOIL DMCC , Lukoil project, WQ2

..............................c.8%....................................................................

khaled elkholy
by khaled elkholy , HR MANAGER , misk for import & export

c. is.............................. righttt ,,,,,,,,,,,,,,,,,.....................................

Salvatore Augello
by Salvatore Augello , owner , A.S. Trade & Consult

answer C8 %________________________________________________________

More Questions Like This