Question
In the CAPM world, two securities, A and B, are priced efficiently, i.e., they fall on the SML. The expected return of A is 19%,
In the CAPM world, two securities, A and B, are priced efficiently, i.e., they fall on the SML. The expected return of A is 19%, and its beta is 1.6. The expected return of B is 15%, and its beta is 1.2. The expected return of the market portfolio is ___and the risk free rate is ___.
| A. | 14% and 4%
| |
| B. | 14% and 5%
| |
| C. | 15% and 5%
| |
| D. | 15% and 6%
| |
| E. | 13% and 3%
|
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International Financial Reporting Standards An Introduction
Authors: Belverd E. Needles, Marian Powers
3rd Edition
1133187943, 978-1133187943
