The Treasury bill rate is 7%, and the expected return on the market portfolio is 12%. According to the capital asset pricing model:
a. What is the risk premium on the market?
b. What is the required return on an investment with a beta of 1.6? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)
c. If an investment with a beta of 0.6 offers an expected return of 8.0%, does it have a positive or negative NPV?
d. If the market expects a return of 10.6% from stock X, what is its beta? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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The Treasury bill rate is 4%, and the expected return on the market portfolio is 11%. According to the capital asset pricing model: a. What is the risk premium on the market? b. What is the required return on an investment with a beta of 1.6? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) c. If an investment with a beta of 0.8 offers an expected return of 8.6%, does it have...
The Treasury bill rate is 4%, and the expected return on the market portfolio is 11%. According to the capital asset pricing model: a. What is the risk premium on the market? b. What is the required return on an investment with a beta of 1.6? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) c. If an investment with a beta of 0.8 offers an expected return of 8.6%, does it have...
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