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Determine Performance Using the CAPM Model For each case shown in the following table, use the CAPM model to calculate the required performance Case Risk-free
Determine Performance Using the CAPM Model For each case shown in the following table, use the CAPM model to calculate the required performance
Case | Risk-free rate Rf | Market performance rm | Beta |
A | 7% | 8 | 1.30 |
B | 8 | 11 | 0.90 |
C | 12 | 12 | -0.20 |
D | 13 | 15 | 1.00 |
E | 5 | 11 | 0.60 |
Formula needed per case***
CAPM es r = rf + (rm - rf)
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