Question
The capital asset pricing model is given by the following equation where all terms actually are understood to be expectations: (Return on asset A =
The capital asset pricing model is given by the following equation where all terms actually are understood to be expectations:
(Return on asset A = Risk free rate + Beta of A*(Return on the Market - Risk Free rate).
If the Risk Free rate is 5% and the market return is 10%, what is the return on ABC, XYZ, and MNO given the following:
ABC= Beta 1.1
XYZ= beta .80
MNO= beta 1.9
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Theoretical Foundations For Quantitative Finance
Authors: Luca Spadafora, Gennady P Berman
1st Edition
9813202475, 978-9813202474
