Stock R has a beta of 2.5, Stock S has a beta of 0.25, the required return on an average stock is 10%, and the risk-free rate of return is 3%. By how much does the required return on the riskier stock exceed the required return on the less risky stock

Excess return=0.1575=15.75%

Explanation:

Given Data:

Stock R beta=2.5

Stock S beta=0.25

return on an average stock=10%

the risk-free rate of return=3%

Required:

Excess return=?

Solution:

Difference in beta=Stock R beta-Stock S beta

Difference in beta=2.5-0.25

Difference in beta=2.25

Market Premium= return on an average stock-the risk-free rate of return

Market Premium=10%-3%

Market Premium=7%

Excess return=Market Premium*Difference in beta

Excess return=7%*2.25

Excess return=0.07*2.25

Excess return=0.1575=15.75%

answer: yo mama

explanation: yo mama

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.