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Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently 5.5 percent, and the expected return for the market is 13.5
Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently
5.5 percent, and the expected return for the market is 13.5 percent. What should be the expected rate of return for each investment (using the CAPM)?
Security | Beta |
|
A | 1.82 | |
B | 0.84 | |
C | 0.63 | |
D | 1.42 |
a.The expected rate of return for security A, which has a beta of 1.82, is ______%. (Round to two decimal places.)
What is the expected rate of return for EACH investment?
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