The risk free rate is 2%. The expected rate of return on the market is 12%. Beta and the expected rate of return for four stocks are as follows.: ABC .8 , 10%; DEF 1, 12%; GHI 1.2 , 13%, and JKL 2, 22%
Which of these stocks should not be purchased?
A) ABC
B) DEF
C) GHI
D) JKL
Answer: C
Business
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The yield on a company's five-year bonds is 5%. The five year swap rate is 4.5% and the five-year Treasury rate is 4%. What would be closest to your best estimate of the five-year CDS spread
A. 200 basis points B. 150 basis points C. 100 basis points D. 50 basis points
Business