Question
12.(Capital Asset Pricing Model)The expected return for the general market is 12.0 percent, and the risk premium in the market is 7.6 percent. Tasaco, LBM,
12.(Capital Asset Pricing Model)The expected return for the general market is 12.0 percent, and the risk premium in the market is 7.6 percent. Tasaco, LBM, and Exxos have betas of 0.847, 0.607, and 0.555, respectively. What are the appropriate expected rates of return for the three securities? Part 1 The appropriate expected return of Tasaco is _____%. (Round to two decimal places.) Part 2 The appropriate expected return of LBM is ____ %. (Round to two decimal places.) Part 3 The appropriate expected return of Exxos is ____%. (Round to two decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started