Question

Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the required return. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Risk-free rate, RF 10% Market return, om 15% Beta, b 0.5 The required return for the asset is % (Round to two decimal places.)

Answer 1

Ans 12.50%

Required Return =	Risk free Return + (Market Return - Risk free return)* Beta
Required Return =	10% + (15% - 10%)*0.5
Required Return =	12.50%