Accordingto the CAPM, a stock is twice as risky as the market portfolio Theexpected return of the
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Accordingto the CAPM, a stock is twice as risky as the market portfolio Theexpected return of the market portfolio is 12 and the risk free rate is 6 Thestock’s price is currently 10 An analyst predicts that the price will be 11 in oneyear According to the analyst, where does this stock plot relative to the SML? Ifthe analyst’s forecast is correct, then by what percentage would the stock’s pricehave to change today in order for it to plot on the SML?
Related Book For
Business Law Principles and Practices
ISBN: 978-1133586562
9th edition
Authors: Arnold J. Goldman, William D. Sigismond
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