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(Capital Asset Pricing Model)Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently 5 percent, and the expected return for the
(Capital Asset Pricing Model)Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently 5 percent, and the expected return for the market is 10 percent. What should be the expected rate of return for each investment (using the CAPM)?
Security | Beta |
---|---|
A | 1.57 |
B | 0.96 |
C | 0.66 |
D | 1.43 |
a.The expected rate of return for security A, which has a beta of 1.57, is _____ %.
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