Question
Manipulating CAPMUse the basic equation for the capital asset pricing model (CAPM) to work each of the following problems.a.Find the required return for an asset
Manipulating CAPMUse the basic equation for the capital asset pricing model
(CAPM)
to work each of the following problems.a.Find the required return for an asset with a beta of
0.95
when the risk-free rate and market return are
5%
and
10%,
respectively. b.Find the risk-free rate for a firm with a required return of
13.081%
and a beta of
1.19
when the market return is
12%.
c.Find the market return for an asset with a required return of
16.019%
and a beta of
0.99
when the risk-free rate is
9%.
d.Find the beta for an asset with a required return of
10.922%
when the risk-free rate and market return are
9%
and
15.2%,
respectively.
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