Question: Equation for CML d Here are data on two companies. The T-bill rate is 2% and the expected market return is 4%. Company B Forecast

Equation for CML

d Equation for CML d Here are data on two companies. The

Here are data on two companies. The T-bill rate is 2% and the expected market return is 4%. Company B Forecast Return 4% 5% Standard Deviation of Return 12% 8% Beta 1.5 1.0 Suppose both company A and B have correlation coefficient to the market equal to 0.5. Draw the Capital Market Line (CML) and mark A and B. [3 marks]

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