Suppose that the Treasury bill rate is 6% and the expected return on the market stays at...

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Finance

Suppose that theTreasury bill rate is 6% and the expected return on the marketstays at 9%. Use the following information.
Stock Beta (?)
United StatesSteel 3.09
Amazon 1.39
SouthwestAirlines 1.27
The TravelersCompanies 1.18
Tesla 1.02
ExxonMobil 0.90
Johnson &Johnson 0.89
Coca-Cola 0.62
ConsolidatedEdison 0.19
Newmont 0.10
Calculate the expectedreturn from Johnson & Johnson. (Do not roundintermediate calculations. Enter your answers as a percent roundedto 2 decimal places.)
Find the highestexpected return that is offered by one of these stocks. (Donot round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.)
Find the lowestexpected return that is offered by one of these stocks. (Donot round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.)
Would U.S. Steel offera higher or lower expected return if the interest rate were 6%rather than 2%? Assume that the expected market return stays at9%.
Would Coca-Cola offera higher or lower expected return if the interest rate were 8%?

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3.6 Ratings (559 Votes)

a 867b 1527c 63d HigherIf the interest rate on Treasury bill was 2 the See Answer

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Suppose that theTreasury bill rate is 6% and the expected return on the marketstays at 9%. Use the following information.StockBeta (?)United StatesSteel3.09Amazon1.39SouthwestAirlines1.27The TravelersCompanies1.18Tesla1.02ExxonMobil0.90Johnson &Johnson0.89Coca-Cola0.62ConsolidatedEdison0.19Newmont0.10Calculate the expectedreturn from Johnson & Johnson. (Do not roundintermediate calculations. Enter your answers as a percent roundedto 2 decimal places.)Find the highestexpected return that is offered by one of these stocks. (Donot round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.)Find the lowestexpected return that is offered by one of these stocks. (Donot round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.)Would U.S. Steel offera higher or lower expected return if the interest rate were 6%rather than 2%? Assume that the expected market return stays at9%.Would Coca-Cola offera higher or lower expected return if the interest rate were 8%?


Stock	Beta (?)
United StatesSteel	3.09
Amazon	1.39
SouthwestAirlines	1.27
The TravelersCompanies	1.18
Tesla	1.02
ExxonMobil	0.90
Johnson &Johnson	0.89
Coca-Cola	0.62
ConsolidatedEdison	0.19
Newmont	0.10