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1 pages/≈275 words
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Subject:
Accounting, Finance, SPSS
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Coursework
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English (U.S.)
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$ 5.62
Topic:
Identifying Security's Market Price
Coursework Instructions:
23. Suppose a risky security pays an expected cash flow of $80 in one year. The risk-free mte is 4% and the expected return on the market index is 10%.
a. If the returns of this security are high when the economy is strong and low when the economy is weak, but the returns vary by only half as much as the market index, what risk premium is appropriate for this security?
b. What is the security's market price?
Coursework Sample Content Preview:
Investment Analysis Task
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Investment Analysis Task
* The appropriate risk premium for this security is 3%.
The returns are expected to vary only half as much as the market index, implying that the security is half ...
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