# Question

a. Given the following holding-period returns, compute the average returns and the standard deviations for the Zemin Corporation and for the market.

b. If Zemin’s beta is 1.54 and the risk-free rate is 4 percent, what would be an expected return for an investor owning Zemin?

c. How does Zemin’s historical average return compare with the return you believe you should expect based on the capital asset pricing model and the firm’s systematicrisk?

b. If Zemin’s beta is 1.54 and the risk-free rate is 4 percent, what would be an expected return for an investor owning Zemin?

c. How does Zemin’s historical average return compare with the return you believe you should expect based on the capital asset pricing model and the firm’s systematicrisk?

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