Question
An asset has a beta of 2.0 and an expected return of 20%. The expected risk premium on the market portfolio is 5% and the
An asset has a beta of 2.0 and an expected return of 20%. The expected risk premium on the market portfolio is 5% and the risk-free rate is 7%. What is the equilibrium return?
Select one:
a. 0.14
b. 0.17
c. 0.13
d. 0.20
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett
4th Edition
0077262379, 978-0077262372
