Partridge plastic's stock has an estimated beta of 1.4, and its required return is 13%. cleaver motors' stock has a beta of 0.8, and the risk-free rate is 6%. what is the required return on cleaver motors' stock? a. 7.0% b. 10.4% c. 12.0% d. 11.0% e. 10.0%

e. 10.0%

Explanation:

Using the capital asset pricing model we have:

Required return = Rf + beta (Rm - Rf)

Where Rf = Risk free return

Rm = Market return

Beta = Beta coefficient

Provided,

Partridge Plastic Stock's information as:

Beta = 1.4

Required return = 13%

Risk free rate = 6%

Putting values in equation, we will get market rate of return

13% = 6% + 1.4 (Rm - 6%)

= Rm - 6%

5% = Rm - 6%

11% = Rm

Now putting this value in equation for information provided for Cleaver Motor's Stock

Required return = 6% + 0.8 (11% - 6%)

= 6% + 4%

= 10%

c

explanation:

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi