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Consider that the CAPM perfectly holds. You calculated that the expected excess return on Walmart should be 0.05 and you know that Walmart has a
Consider that the CAPM perfectly holds. You calculated that the expected excess return on Walmart should be 0.05 and you know that Walmart has a beta of 1.1. If you calculated that American Airlines has a beta of 1.6 what must be the expected excess return on American Airlines? Please provide your solution in decimal form, rounded to 3 decimal places. Only do the rounding of the final solution, keep all decimals in the intermediate stages of calculation (e.g., if the solution is 7.63% report 0.076)
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