Question: find solution Assume that CAPM is an appropriate model for pricing assets inthe economy. Consider the following information about the market portfolio and the risk-free

find solution

Assume that CAPM is an appropriate model for pricing assets inthe economy. Consider the following information about the market portfolio and the risk-free rate: E(RpyJ=15% Op =20% R= 4% Also, assume that the common stock of Boilermaker Corporation has E(Rp) =25% and op = 52%. Required: a. What is the systematic variance of the Boilermaker's common stock? b. What is the unsystematic variance of the Boilermaker's common stock? Note: For all requirements, do not round intermediate calculations. Round your answers to 3 decimal place. (For this question, you need to estimate the CAPM beta first. In doing so, please round your beta estimate to 1 decimal place before calculating Systematic and Unsystematic variance. Do not round any other intermediate number, and make sure to round your final answers to 3 decimal places! )

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