Intro

Use the expected return-beta equation from the CAPM.

Attempt 1/8 for 10 pts.

Part 1

What is the expected return for a stock if the risk-free rate is 3%, beta 1.1 and the expected return for the market portfolio is 8%?

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Attempt 1/8 for 10 pts.

Part 2

What is the risk-free rate if beta is 1.1, the expected return 8.4% and the expected return for the market portfolio is 8%?

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Attempt 1/8 for 10 pts.

Part 3

What is beta if the risk-free rate is 3%, the expected return 13% and the expected return for the market is 8%?

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Attempt 1/8 for 10 pts.

Part 4

What is the expected return for the market if the risk-free rate is 3%, beta 1.1 and the expected return 13%?

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