Question: Answer the missing value from letters A-F. Show workings/solution The equation: Using the beta coefficient, (b) to measure nondiversifiable risk the CAPM equation is: Kj

 Answer the missing value from letters A-F. Show workings/solution The equation:

Answer the missing value from letters A-F. Show workings/solution

The equation: Using the beta coefficient, (b) to measure nondiversifiable risk the CAPM equation is: Kj = Rf + (Km - Rf) b = Kj = required return of an asset Rf = Risk free rate of return Km = Market return on the market portfolio of assets b beta coefficient or index of nondiversifiable risk for asset = Example of CAPM Equation: mon Case Risk free Rate Rf A 5% B 8% 10% ? 6% 5% Market return Km 8% 13% 15% 12% ? 16% Beta.be Required Return 1.30 ? 0.90 ? -0.20 ? 1.0 12% 0.60 9% ? 10% Required: Using CAPM equation, compute the missing value (?)

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