Assignment $3$

Question $5,$ P$8-32($similar to$)$

Part $1$ of $4$

HW Score: $5\mathrm{.}45\%,5\mathrm{.}45$ of $100$ points

Points: $0$ of $15$

Manipulating CAPM Use the basic equation for the capital asset pricing model $($CAPM$)$ to work each of the following problems.

a$.$ Find the required return for an asset with a beta of $0\mathrm{.}76$ when the risk$-$free rate and market return are $9\%$ and $11\%,$ respectively.

b$.$ Find the risk$-$free rate for a firm with a required return of $16\mathrm{.}153\%$ and a beta of $1\mathrm{.}37$ when the market return is $14\%.$

c$.$ Find the market return for an asset with a required return of $9\mathrm{.}805\%$ and a beta of $0\mathrm{.}88$ when the risk$-$free rate is $5\%.$

d$.$ Find the beta for an asset with a required return of $10\mathrm{.}432\%$ when the risk$-$free rate and market return are $7\%$ and $11\mathrm{.}4\%,$ respectively.

a$.$ The required return for an asset with a beta of $0\mathrm{.}76$ when the risk$-$free rate and market return are $9\%$ and $11\%,$ respectively, is $\%.($Round to two decimal places.$)$