Question 8 Suppose the CAPM holds, given the following information: market portfolio's expected return = 896...

Question

Question

Answer 1

Answer #1

CAPM ret = Risk Free Rate + Beta ( Market ret - Risk Free Rate )

= 4% + 1.5 ( 8% - 4%)

= 4% + 1.5 (4%)

= 4% + 6%

= 10%

Answer 2

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