Question
The market portfolio has a beta of __________. If a firm's beta is 1.56, the firm has _________ systematic risk than the market portfolio. 1;
The market portfolio has a beta of __________. If a firm's beta is 1.56, the firm has _________ systematic risk than the market portfolio.
| 1; more | ||
| 0.5; more | ||
| 1; less | ||
| 0; more |
10 points
QUESTION 2
Given the following, calculate the expected return of the firm according to CAPM.
Rf: 3%
Market Risk Premium: 5%
Beta of firm: 1.8
| 12.00% | ||
| 10.38% | ||
| 12.97% | ||
| 14.71%
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Public Finance
Authors: Richard W. Tresch
2nd Edition
0126990514, 978-0126990515
