Here are data on two companies The T bill rate is 4 and the market risk premium is 6 Company $1 Discount Store Everything $5 Forecasted Return Standard Deviation of Returns Beta 12 8 1 5 11 10 1 0 What would be the fair return for each company, according to the capital asset pricing model (CAPM) Ex...

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Here are data on two companies. The T-bill rate is 4% and the market risk premium is

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Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%.

Company	$1 Discount Store	Everything $5
Forecasted Return Standard Deviation of Returns Beta	12% 8% 1.5	11% 10% 1.0

What would be the fair return for each company, according to the capital asset pricing model (CAPM)? Explain how the CAPM is used to perform this calculation and how a financial advisor would utilize this information to advise a client.

Posted Date: Jun 25, 2024 11:58 PM

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Here are data on two companies. The T-bill rate is 4% and the market risk premium is

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