Question
Here are data on two companies. The T-bill rate is 5.8% and the market risk premium is 8.9%. Company Forecast return Standard deviation of
Here are data on two companies. The T-bill rate is 5.8% and the market risk premium is 8.9%. Company Forecast return Standard deviation of returns Beta $1 Discount Store 16% 28% 1.30 Everything $5 15% 30% 1.00 What would be the fair return for each company, according to the capital asset pricing model (CAPM)? (Round your answers to 2 lecimal places.) Company $1 Discount Store Everything $5 Expected Return % %
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Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
9th Edition
73530700, 978-0073530703
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