Greg Noronha has been told the expected return on Merchants Bank is 7.00%, He knows the risk-free rate is 2.10%, the market risk premium is 6.45%, and Merchants' beta is 0.78. Based on the Capital Asset Pricing Model, Merchants Bank is:

Merchants Bank is overvalued

Explanation:

In the first, we need to determine the required rate of return on Merchant Bank stock using the Capital Asset Pricing Model formula for the  required rate of return found below:

The required rate of return=risk-free rate+beta*market risk premium

risk-free rate=2.10%

beta=0.78

market risk premium=6.45%

The required rate of return=2.10%+(0.78*6.45%)

the required rate of return=7.13%

Since the expected return(discount rate) used in valuing Merchant Bank is lower viz-a-viz the required rate of return of 7.13%, the stock is said to overvalued

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!

anjan should should report alteast 5000 on the first apyment and 10,000 each year

explanation: