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0.8 bx1 bx2 bya 1.2 1.8 by 2.2 Now answer the following questions: a. Based on the APT model, compute the expected retum for X
0.8 bx1 bx2 bya 1.2 1.8 by 2.2 Now answer the following questions: a. Based on the APT model, compute the expected retum for X b. Based on the APT model, compute the expected retum for Y C. We are given that X is currently priced at Rs.90 and is expected to pay a dividend of Rs. 15 during the coming year. Calculate the expected p of X one year from now. [2] d. We are also given that Y is currently priced at Rs. 140 and is expected to pay a dividend of Rs. 25 during the coming year. Calcul the expected price of Y one year from now. [2] e. Compare and contrast CAPM model with APT model highlighting the advantages and disadvantages of both models. [2]
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