8 MC algo 13-26 CAPM The risk-free rate is 3.4 percent and the market expected return...

Question

Question

8 MC algo 13-26 CAPM The risk-free rate is 3.4 percent and the market expected return is 11.9 percent. What is the expected r

Answer 1

Answer #1

A. 13.52%

Expected return = Risk-free rate + Beta(Market expected return - Risk-free rate)

Expected return = 0.034 + 1.19(0.119 - 0.034)

Expected return = 0.1352 or 13.52%

Answer 2

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