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4. (Required Rate of Return using CAPM): to. Calculate a fair rate of return for XYZ shares, which have a Beta of 1.2. The risk-free rate is 6%, the market portfolio (New York Stock Exchange stocks) has an expected return of 16%. b. Why is the rate you determined a fair rate? 5. (Capital Asset Pricing Model): XYZ Manufacturing Inc. is considering various investments. The rate on treasury bills is currently 6.75%, and the expected return for the market is 12%. What will be the required rates of return for each investment? (Use CAPM). Value (Security) Beta A 1.50 B .90 C .70 D 1.15

5. (Capital Asset Pricing Model): XYZ Manufacturing Inc. is considering various investments. The rate on treasury bills is currently 6.75%, and the expected return for the market is 12%. What will be the required rates of return for each investment? (Use CAPM). Value (Security) Beta A 1.50 B .90 C .70 D 1.15