The following data are used to answer questions 11 to 15. Based on the following data of Apple stock traded on the NYSE and the market benchmark S&P 500: Apple Stock Returns Year S&P 500 Index Returns (Market) 2014 0.23 0.25 2015 0.12 -0.14 2016 0.08 0.07 2017 -0.15 -0.12 2018 -0.18 -0.1 2019 0.18 0.19 2020 0.36 0.3 Risk-free Rate: 0.03
The following data are used to answer questions 11 to 15. Based on the following data of Apple stock traded on the NYSE and the market benchmark S&P 500: Apple Stock Returns Year S&P 500 Index Returns (Market) 2014 0.23 0.25 2015 0.12 -0.14 2016 0.08 0.07 2017 -0.15 -0.12 2018 -0.18 -0.1 2019 0.18 0.19 2020 0.36 0.3 Risk-free Rate: 0.03
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter8: Liabilities And Stockholders' Equity
Section: Chapter Questions
Problem 8.7MBA: Stock split Using the data from E8-22. indicate the effects on ne assets and EPS of the stock spilt.
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Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Question
Use the picture to answer the following questions.
14. Compute the beta of Apple stock on the SAMPLE basis.
a. β= 0.7236
b. β= 0.8114
c. β= 0.8791
d. β= 1.2558
e. β= 1.4366
15. What does the Beta of Apple stock computed at question 14 tells you if the S&P 500
index increases by 15%?
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