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4. Consider the following information for company XYZ: Probability Market Return 0.10 State 1 2 3 4 0.30 0.40 0.20 -0.12 0.03 0.10 0.20
4. Consider the following information for company XYZ: Probability Market Return 0.10 State 1 2 3 4 0.30 0.40 0.20 -0.12 0.03 0.10 0.20 Company Return -0.24 0.00 0.15 0.50 Assume that Cov(XYZ, Market)= 1.8408% and that the risk free rate = 3%. Using the CAPM, find XYZ's required rate of return.
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The Capital Asset Pricing Model CAPM is given by r Rf beta Rm Rf where r required rate of retur...
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Understanding Basic Statistics
Authors: Charles Henry Brase, Corrinne Pellillo Brase
6th Edition
978-1133525097, 1133525091, 1111827028, 978-1133110316, 1133110312, 978-1111827021
