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Using the following information determine the expected rate of return for a risky asset using CAPM, consider the following example stocks assuming that you have

Using the following information determine the expected rate of return for a risky asset using CAPM, consider the following example stocks assuming that you have already computed their betas

Stocks Beta

A 0.70

B 1.00

C 1.15

D 1.40

E -0.30

Also assume that you expect the economy RFR to be 6% (0.06) and the expected return on the market portfolio (E(Rm)) to be 8% (0.08) which implies a market risk premium of (0.04). What would be the SML required rate of return for the following stocks. A, B,C,D and E

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