You want to estimate the required return for Apple, and you use the CAPM for this purpose. Apple has a beta of 1.31. Your estimate of the risk free rate is 3.5%, and your estimate of the long-term return on the market is 9%.

What is the required return for Apple? Show your work.

Questions

1. Answer 2 of the following 3 items from A, B or C.

1. Explain what a basis point is.
2. Explain what a zero-coupon bond is.
3. Explain what an ADR is.