Question: 1. Based on the CAPM, you have found that the required rate of return on Microsoft Inc. stock is 17.74%. The stock has a beta

1. Based on the CAPM, you have found that the required rate of return on Microsoft Inc. stock is 17.74%. The stock has a beta of 0.6. If the market risk premium is 6.05%, what is the implied risk-free rate of return?

Can you solve it by using a calculator step by step so I can study it.

2. You are considering the purchase of 100 shares of Microsoft Inc. common stock. The stock currently has a listed beta of 1.4. You believe that you can obtain a return on the market portfolio of 9.45% and a return on the risk-free asset of 3.01%. Based on the CAPM, what should be the required rate of return on Microsoft Inc. common stock?

Can you solve it by using a calculator step by step so I can study it.

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