Question
Assume that both portfolios A and B are well diversified, that E(rA) = 12%, and E(rB) = 9%. If the economy has only one factor,
Assume that both portfolios A and B are well diversified, that E(rA) = 12%, and E(rB) = 9%. If the economy has only one factor, and A = 1.2, whereas B = .8, what must be the risk-free rate? (Do not round intermediate calculations.)
Risk-free rate=__ %
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Handbook Of The Equity Risk Premium
Authors: Rajnish Mehra
1st Edition
0444508996, 978-0444508997
