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Please solve expected rate of return on secutiry A, B,C,D X) P8-16 (similar to) Question Help Using the CAPM to find expected returns) Sante Capital
Please solve expected rate of return on secutiry A, B,C,D
X) P8-16 (similar to) Question Help Using the CAPM to find expected returns) Sante Capital operates two mutual funds headquartered in Houston, Texas. The firm is evaluating the stock of four different firms for possible inclusion in its fund holdings. As part of their analysis, Sante's managers have asked their junlor analyst to estimate the Investor-required rate of return on each firm's shares using the CAPM and the tollowing estimates: The rate of interest on short-term U.S. Treasury securttles Is cumenty 2.5 percent, and the expected returm for the market porttolio is 8 percent. What should be the expected rates of return for each investment? Security Beta 1.68 0.78 1.29 0.95 a. The expected rate or retum tor security A, which has a beta ot 1.68, is . %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer Clear All Check Answer emainingStep by Step Solution
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