Question
The risk-free rate is 8% and the expected rate of return on the market portfolio is 15%. a. Calculate the required rate of return on
The risk-free rate is 8% and the expected rate of return on the market portfolio is 15%.
a.Calculate the required rate of return on a security with a beta of 1.30.(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Required return %?
If the security is expected to return 18%, is it overpriced or underpriced?
- Overpriced or
- Underpriced?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
15th edition
1337671002, 978-1337395250
