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Ider 2 Ex Post Observations 1 2 3 4 5 Market Return -5.7% 12.0% 10.1% 20.7% 17.9% Security J Return -10.6% 25.5% 15.2% 22.8% 26.3%

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Ider 2 Ex Post Observations 1 2 3 4 5 Market Return -5.7% 12.0% 10.1% 20.7% 17.9% Security J Return -10.6% 25.5% 15.2% 22.8% 26.3% a If therisk-free rate is expected to be 4 percent for the coming period, and if the best guess of the market's return is its historical average, then what is the best estimate of Security J's required rate of return for the coming period, assuming that CAPM is correct? older 13.8% 13.6% at 13.4% 13.2% socksX O 13.0% C

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