Question
Asset X has a beta of 1.0. The market risk premium is 6% and the risk-free rate is 4%. Based on your own forecast, Asset
Asset X has a beta of 1.0. The market risk premium is 6% and the risk-free rate is 4%.
Based on your own forecast, Asset X would offer you a return of 12%. I.e., the forecast return is 12%.
The return from CAPM is __________% and you would ____________ the stock.
11; buy
9: sell
9: buy
11: sell
10: sell
10; buy
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Bond Markets Analysis And Strategies
Authors: Frank J.Fabozzi
7th Edition
0136078974, 978-0136078975
