At the beginning of 2007 (the year the iPhone was introduced), Apple's beta was

1.4

and the risk-free rate was about

4.1%.

Apple's price was

$83.91.

Apple's price at the end of 2007 was

$199.64.

If you estimate the market risk premium to have been

5.1%,

Did Apple's managers exceed their investors' required return as given by the CAPM?
 

Part 1

 

The expected return is?


 

Part 2

 
The realized return is?


 

Part 3


Did Apple's managers exceed their investors' required return as given by the CAPM?

Answer rating: 100% (QA)

To calculate the expected return using the Capital Asset Pricing Model CAPM we can use the following ... View the full answer