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You have some information on two companies: Company BVH TX inc. Forecast return 12 % 11 % Standard deviation of returns 12 % 14 %

You have some information on two companies:

Company	BVH		TX inc.
Forecast return	12	%	11	%
Standard deviation of returns	12	%	14	%
Beta	1.6		1.0

You also know that the T-bill rate is 4.80% and the market risk premium is 5.90%.

What would the return for BVH be; using the capital asset pricing model (CAPM)?

Type solution as a percentage (e.g. .01 write as 1) Do not add units.

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