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Assume that the T - Bill rate is about 5 % in the financial market . Assume also that the expected return required by the
Assume that the T - Bill rate is about 5 % in the financial market . Assume also that the expected return required by the customer for a security with beta of 1 is 16 % . Based on the CAPM ; suppose you consider buying a share of stock at a price of 40 $ . The share is expected to be sold from 45 $ next year . If the evaluated beta of this share is 0.5 , what is the alpha of this security ?
Assume that the T-Bill rate is about 5 in the financial market. Assume also that the expected return required by the customer for a security with beta of 1 is 16%. Based on the CAPM; suppose you consider buying a share of stock at a price of 40$. The share is expected to be sold from 45% next year. If the evaluated beta of this share is 0.5, what is the alpha of this security? Select one: a.1% b.2% C3% d.5% e.-1% f.-2% 9.-3% h.-4% Step by Step Solution
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