Question
Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently 6 percent, and the expected return for the market is 13
Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently 6 percent, and the expected return for the market is 13 percent. What should be the expected rate of return for each investment (using the CAPM)?
Security | Beta |
---|---|
A | 1.81 |
B | 1.04 |
C | 0.45 |
D | 1.26 |
a.The expected rate of return for security A, which has a beta of 1.81, is what%.
b.The expected rate of return for security B, which has a beta of 1.04,is what%.
c.The expected rate of return for security C, which has a beta of 0.45,is what%.
d. The expected rate of return for security D, which has a beta of 1.26, is what%.
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