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Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently 5 percent, and the expected return for the market is 10
Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently 5 percent, and the expected return for the market is 10 percent. What should be the expected rate of return for each investment (using the CAPM)?
Security | Beta |
|
A | 1.74 | |
B | 0.93 | |
C | 0.71 | |
D | 1.22 |
Expected rate of return for security A:
Expected rate of return for security B:
Expected rate of return for security C:
Expected rate of return for security D:
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