Question
The following data have been developed for the Milliken Company and for market: Year Market Return, (Rm) Company Return, (Rj) 2020 .27 .25 2019 .12
The following data have been developed for the Milliken Company and for market: Year Market Return, (Rm) Company Return, (Rj) 2020 .27 .25 2019 .12 .05 2018 -.03 -.05 2017 .12 .15 2016 -.03 -.10 2015 .27 .30 The yield to maturity on Treasury bills is 0.066 and is expected to remain at this point for the foreseeable future. Calculate the following: 3 (a) The expected market return (b) The variance of the market return (c) The expected rate of return for the Milliken Company (d) The covariance of the return for the Milliken Company with the return on the market. (e) Write the equation of the security market line. (f) What is the required rate of return for the Milliken Company
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