Question
Anita, Inc. is considering the following investments. The current rate on Treasury bills is 5 percent, and the expected return for the market is 12.5
Anita, Inc. is considering the following investments. The current rate on Treasury bills is 5 percent, and the expected return for the market is 12.5 percent. Using the CAPM, what rates of return should Anita require for each individual security?
Stock | Beta |
---|---|
H | 0.86 |
T | 1.51 |
P | 0.89 |
W | 1.17 |
a.The expected rate of return for security H, which has a beta of 0.86, is what%.
b.The expected rate of return for security T, which has a beta of 1.51, is what %.
c.The expected rate of return for security P, which has a beta of 0.89, is what %.
d. The expected rate of return for security W, which has a beta of1.17, is what%.
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