Question: Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. What would be the fair return for

Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%.

Here are data on two companies. The T-bill rate is

What would be the fair return for each company, according to the capital asset pricing model(CAPM)?

Company Forecasted return Standard deviation of returns $1 Discount Store 12% 8% 1.5 Everything $5 11% 10% 1.0

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