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Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. Company Forecasted return Standard deviation of returns
Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. Company Forecasted return Standard deviation of returns Beta $1 Discount Store 12% 8% 1.5 Everything $5 11% 10% 1.0 What would be the fair return for each company, according to the capital asset pricing model (CAPM)? (Do not round intermediate calculations.) Company Expected Return $1 Discount Store % Everything $5 %
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