Question
Anita, Inc. is considering the following investments. The current rate on Treasury bills is 7.5 percent, and the expected return for the market is 13
Anita, Inc. is considering the following investments. The current rate on Treasury bills is
7.5
percent, and the expected return for the market is
13
percent. Using the CAPM, what rates of return should Anita require for each individual security?
Stock | Beta |
---|---|
H | 0.86 |
T | 1.57 |
P | 0.93 |
W | 1.26 |
a.The expected rate of return for security H, which has a beta of
0.86,
is
%.
(Round to two decimal places.)
b.The expected rate of return for security T, which has a beta of
1.57,
is
nothing%.
(Round to two decimal places.)
c.The expected rate of return for security P, which has a beta of
0.93,
is
%.
(Round to two decimal places.)
d. The expected rate of return for security W, which has a beta of
1.26,
is
%.
(Round to two decimal places.)
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