Question
The risk-free rate is 6% and the expected rate of return on the market portfolio is 10%. a. Calculate the required rate of return on
| The risk-free rate is 6% and the expected rate of return on the market portfolio is 10%. |
| a. | Calculate the required rate of return on a security with a beta of 1.24.(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) |
| Required return | % |
| b. | If the security is expected to return 16%, is it overpriced or underpriced? | ||
|
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Fundamentals of Financial Management
Authors: Eugene F. Brigham
Concise 9th Edition
1305635937, 1305635930, 978-1305635937
