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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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