## (Solution Download) Suppose that the Treasury bill rate is 6% and that the expected return on the market is 2%. Assume t

 Suppose that the Treasury bill rate is 6% and that the expected return on the market is 2%. Assume that the expected return on the market stays at 10%. Use the following information.

 Stock Beta (?) A 1.78 B 1.54 C 1.53 D 0.98 E 0.95 F 0.80 G 0.75 H 0.66 I 0.42 J 0.40

 a. Calculate the expected return from H. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 Expected return %

 b. Find the highest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 Highest expected return %

 c. Find the lowest expected return that is offered by one of these stocks. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 Lowest expected return %

d.

Assume that the expected market return stays at 10%. Would C

offer a higher or lower expected return if the Treasury bill

interest rate were 6% rather than 2%?

 Higher Lower

e.Assume that the expected market

return stays at 10%. Would J offer a higher or lower expected

return if the interest rate were 6% rather than 8%?

 Higher Lower

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