Question
The Treasury bill rate is 5%, and the expected return on the market portfolio is 10%. According to the capital asset pricing model: a. What
The Treasury bill rate is 5%, and the expected return on the market portfolio is 10%. According to the capital asset pricing model:
a. What is the risk premium on the market? b. What is the required return on an investment with a beta of 1.5? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) c. If an investment with a beta of 0.9 offers an expected return of 9.1%, does it have a positive or negative NPV? d. If the market expects a return of 11.5% from stock X, what is its beta? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
a.Market risk premium%
b.Return on investment%
c.NPV
d.Beta
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