Here are data on two companies. The T-bill rate is 5.6% and the market risk premium...

 

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Here are data on two companies. The T-bill rate is 5.6% and the market risk premium is 7.1%. Company Forecast return $1 Discount Store 14% Standard deviation of returns 16% Beta 1.6 Everything $5 13% 18% 1 What would be the fair return for each company, according to the capital asset pricing model (CAPM)? Company $1 Discount Store Everything $5 Expected Return % % Here are data on two companies. The T-bill rate is 5.6% and the market risk premium is 7.1%. Company Forecast return $1 Discount Store 14% Standard deviation of returns 16% Beta 1.6 Everything $5 13% 18% 1 What would be the fair return for each company, according to the capital asset pricing model (CAPM)? Company $1 Discount Store Everything $5 Expected Return % %

Answer rating: 100% (QA)

Using the formula Return T Bi... View the full answer