Suppose that the treasury bill rate is 6% rather than 2%. assume that the expected return on the market stays at 9%. Use the information in from the following stocks: **b=Beta,r=Expected Return**
Caterpillar- b=1.66, r=13.6
Dow Chemical- b=1.65, r=13.5
Ford- b=1.44, r=12.1
Microsoft- b=.98, r=8.9
Apple- b=.91, r=8.4
Johnson & Johnson- b=.53, r=5.7
Walmart- b=.45, r=5.2
Cambell Soup- b=.39, r=4.7
Consolidated Edison- b=.17, r=3.2
Newmont- b=0, r=2
a) Calculate the expected return from Johnson & Johnson
b) Find the highest expected return that is offered by one of these stocks
c) Find the lowest expected return that is offered by one of these stocks
d) Would Ford offer a higher or lower expected return if the interest rates were 2% rather than 6%? Assume that the expected market return stays at 9%.
e) Wouls Walmart offer a higher or lower expected return if the interest rates were 8%?