Assume a risk-free rate of 2.69% and an expected return of the market of 8.11%. Assume...
Assume a risk-free rate of 2.69% and an expected return of the market of 8.11%. Assume further that we have an asset with a beta of 2.09. According the CAPM, what should the expected return of this asset be? (give the answer as a percentage)
Homework Answers
Expected return=risk free rate+beta*(market rate-risk free rate)
=2.69+2.09*(8.11-2.69)
which is equal to
=14.0178%
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