Question
(Capital asset pricing model)Anita, Inc. is considering the following investments. The current rate on Treasury bills is 7 percent, and the expected return for the
(Capital asset pricing model)Anita, Inc. is considering the following investments. The current rate on Treasury bills is
7
percent, and the expected return for the market is
10.5
percent. Using the CAPM, what rates of return should Anita require for each individual security?
Stock | Beta |
|
H | 0.75 | |
T | 1.72 | |
P | 0.85 | |
W | 1.31 |
a.The expected rate of return for security H, which has a beta of
0.75,
is
nothing%.
(Round to two decimal places.)b.The expected rate of return for security T, which has a beta of
1.72,
is
nothing%.
(Round to two decimal places.)c.The expected rate of return for security P, which has a beta of
0.85,
is
nothing%.
(Round to two decimal places.)d. The expected rate of return for security W, which has a beta of
1.31,
is
nothing%.
(Round to two decimal places.)
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