1. Assume that the risk-free rate is 4% and the expected market risk premium is 9%. You are considering buying a share of Company B at a price of $72. Company B has a beta of 1.2 and is expected to pay a dividend of $2 per share next year. You expect to be able […]
The value of proposed investments projects Assess the value of proposed investment projects. Investment Project Value This competency assessment addresses assessing the value of investment projects. The Arbitrage Pricing Theory helps calculate required stock returns considering a number of factors. In this Assignment, you will apply Arbitrage Pricing Theory to a business scenario. Prepare this […]
Description Your discussion should focus on the following risks: project-specific risk, industry-specific risk, competitive risk, international risk, and market risk Discuss how diversification in an investment helps in reducing the risk associated with the investment Use different models like CAPM, APM, etc., to conduct an analysis of risk vs return Valuation methods used to choose […]
1) How can you use CAPM to construct a portfolio of stocks? 2) Why does the Fed increase or decrease the interest rate and what effect does it have on the market?
Describe the key assumptions underlying CAPM.
