If in problem 2 the beta (b) were 1.9 and the other values remained the same, what

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If in problem 2 the beta (b) were 1.9 and the other values remained the same, what is the new value of Ke? What is the relationship between a higher beta and the required rate of return (Ke)?

Problem 2

If RF = 6 percent, b = 1.3, and the ERP = 6.5 percent, compute Ke(the required rate of return).

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Fundamentals of Investment Management

ISBN: 978-0078034626

10th edition

Authors: Geoffrey Hirt, Stanley Block

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Question Posted: Sep 21, 2015 05:25 AM

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If in problem 2 the beta (b) were 1.9 and the other values remained the same, what

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a As the equation shows the required r...View the full answer

Fundamentals of Investment Management

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