Question
Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems. a.Find the required return for an asset
Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems.
a.Find the required return for an asset with a beta of 0.90 when the risk-free rate and market return are 8% and 12%,= respectively.
b.Find the risk-free rate for a firm with a required return of 15.000% and a beta of 1.25 when the market return is 14%.
c.Find the market return for an asset with a required return of 15.996% and a beta of 1.10 when the risk-free rate is 9%.
d.Find the beta for an asset with a required return of 15.000% when the risk-free rate and market return are 10% and 12.5%, respectively.
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