Question
The Treasury bill rate is 7%, and the expected return on the market portfolio is 13%. According to the capital asset pricing model: a. What
The Treasury bill rate is 7%, and the expected return on the market portfolio is 13%. 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 1.8?(Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)
c.If an investment with a beta of 0.5 offers an expected return of 9.4%, does it have a positive or negative NPV?
d.If the market expects a return of 11.2% 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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