The return on the market is 10.5% and the risk-free rate is 2.90%. The investor is...

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The return on the market is 10.5% and the risk-free rate is 2.90%. The investor is conservative and his beta (B) is 0.75. a) What is the required rate of return for this investment using the CAPM approach? b) What if the (B) is 1.75, but the risk-free rate is 5% and the market return is 10.5% ? What is the required rate of return for this investment? The return on the market is 10.5% and the risk-free rate is 2.90%. The investor is conservative and his beta (B) is 0.75. a) What is the required rate of return for this investment using the CAPM approach? b) What if the (B) is 1.75, but the risk-free rate is 5% and the market return is 10.5% ? What is the required rate of return for this investment?

Answer rating: 100% (QA)

a To calculate the required rate of return using the Capital Asset Pricing Mode... View the full answer