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Betas and Expected Stock Returns. Use the capital asset pricing model to estimate the
expected return for each of these stocks. You will need a figure for the current Treasury bill rate.
You can find this also on finance.yahoo.com by clicking on Bonds?Rates. Assume for your
estimates a market risk premium of 7%.
Try comparing the stock betas of
Google (GOOG), @ 691.02
The Home Depot (HD), @132.73
Du Pont (DD), @66.41
Altria Group (MO), and @ 62.19
Caterpillar (CAT). @ 77.75
2. Fund Betas. Log on to www.fidelity.com and look at the list of mutual funds that are managed
by Fidelity. Some of these funds, such as the Aggressive Growth Fund, appear from their names
to be high-risk. Others, such as the Balanced Fund, appear to be low-risk. Pick several apparent
high- and low-risk funds and then check whether their betas really do match the fund?s name.
Paper#9209950 | Written in 27-Jul-2016Price : $17.85