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You are considering the purchase of real estate that will provide perpetual income that should...

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Finance

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You are considering the purchase of real estate that will provide perpetual income that should average $51,000 per year. How much will you pay for the property if you believe its risk is the same as the market portfolio risk? The T-bill rate is 4%, and the expected market return is 12.0%. a. 425,000 b. 1,275,000 c. Cannot be determined 22. A stock with a beta of 0.8 has an expected rate of return of 12%. If the market return this year turns out to be 5 percentage points below expectations, what would be the rate f return on the stock? a. 4% b. 8% ?. 12% d. Cannot be determined? 23, A stock's total risk is dependent upon the stock'sand- a. b. c. d. 24. standard deviation; company specific risk npany specific beta; market risk specific risk; market risk aggressive risk; defensive risk If a stock's beta is 0.8 during a period when the market portfolio was down by 10%, then we could expect this individual stock to: a. lose more than 10%. b. lose, but less than 10%. c. gain more than 10%. d. gain, but less than 10%

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