Question: Consider the CAPM model. Suppose you know that the expected returns and betas of two assets are as follows: E r subscript 1 equals 6
Consider the CAPM model. Suppose you know that the expected returns and betas of two assets are as follows: E r subscript 1 equals 6 space space space beta subscript 1 equals 1 E r subscript 2 equals 10 space space beta subscript 2 equals 2 F i n d space t h e space i n t e r c e p t space o f space t h e space C A P M space e q u a t i o n semicolon space t h a t space i s comma space f i n d space a space o f space t h e space l i n e E r equals a plus
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