Q8 homework 6

Q8: An investment group is reviewing three investment opportunities, the details of which are as follows: INVESTMENT OPPORTUNITY EXPECTED INTERNAL RATE OF RETURN (%) BETA 1 13.0 0.85 2 14.0 1.00 3 18.0 The risk-free rate of return is 7.0% and the market premium is 4.0%. The investment group use the Capital Asset Pricing Model (CAPM) to determine whether opportunities should be accepted or rejected. what the return-on-investment opportunity 1, as predicted by the CAPM, is