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The Treasury bill rate is 4%, and the expected return on the market portfolio is 12%. Using the capital asset pricing model: Draw a graph
- The Treasury bill rate is 4%, and the expected return on the market portfolio is 12%. Using the capital asset pricing model:
- Draw a graph showing how the expected return varies with beta.
- What is the risk premium on the market?
- What is the required return on an investment with a beta of 1.5?
- If the market expects a return of 11.2% from stock X, what is its beta?
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Enterprise Risk Management In Finance
Authors: David L. Olson, Desheng Dash Wu
1st Edition
1349691038, 978-1349691036
