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HSH Frank ICF: CAPM Flashcards | StudBud

Explore/HSH Frank ICF: CAPM

HSH Frank ICF: CAPM

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Beta Risk-free rate Equity risk premium Capital Asset Pricing Model

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Questions 10

Answers

1
Which company has the highest expected return ?
Walmart
Mc Donalds
Ford
Google
2
Identify the correct CAPM base formular
Risk-free rate+(Beta x Equity risk premium)=Expected Loss
Equity risk premium+(Beta x Risk-free rate)=Expected Return
Risk-free rate+(Beta x Equity risk premium)=Expected Return
Risk-free rate + Equity risk premium = Expected Return
3
Which company has not a Beta near to 1 ?
Apple
Burger King
Microsoft
Google
4
Where we can never see Beta > 1 ?
Food companies
Banks
Home construction
Car companies
5
What is CAPM ?
Capital Asset Pricing Management
Consumer Average Pricing Method
Capital Acquisition Pricing Model
Capital Asset Pricing Model
6
What comprises the "Risk free rate" ?
expected rate of market fluctuation + inflation
price risk + expected rate of inflation
risk free money + expected return
time value of money + expected rate of inflation
7
What is Beta ?
Risk that can be avoided through diversification
Systematic Risk
Risk aversion
Market wide risk that happens only to special companies
8
What is the risk free rate to be assumed on a high level ?
6%
5%
11%
5,5%
9
Which component is not part of the CAPM formular ?
Weighted average capital cost
Equity risk premium
Risk-free rate
Beta
10
A Beta close to 0 we can see at...
Banks
Mc Donald's
Tech companies
Car companies