The Treasury bill rate is 14 percent, and the

expected return on the market portfolio is 22

percent. Using the capital asset pricing model

answer the following:

What is the risk premium on the market?

What is the required return on an

investment with a beta of 1.5?

3. If an investment with a beta of 0.8 offers an

expected return of 9.8 percent, does it have a

positive NPV?