Question
The risk-free rate is 3% and the expected rate of return on the market portfolio is 8%. a. Calculate the required return of a security
The risk-free rate is 3% and the expected rate of return on the market portfolio is 8%.
a. Calculate the required return of a security with a beta of 2.16 and an expected rate of return of 13%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Required return %
b. Is the security overpriced or underpriced?
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Return Distributions In Finance
Authors: Stephen Satchell, John Knight
1st Edition
0750647515, 978-0750647519
