The formula for the CAPM is the following: T; = TRF + (IM - TRE) * B;

a. If a GM and Google were both to have a = 1.5, would the two firms have the

same expected return under the CAPM? Explain.

b. What is the expected return for the GM from part a, if the riskfree rate is 3% that the expected return on the market is 12%?

The formula for the CAPM is the following: rj=rRF+(rMrRF)j a. If a GM and Google were both to have a =1.5, would the two firms have the same expected return under the CAPM? Explain. b. What is the expected return for the GM from part a, if the riskfree rate is 3% that the expected return on the market is 12%