Intro

Use the expected return-beta equation from the CAPM.

Attempt 1/10 for 10 pts.

Part 1

What is the expected return for a stock if the risk-free rate is 4%, beta 1 and the expected return for the market portfolio is 7%?

Part 2

What is the risk-free rate if beta is 1.1, the expected return 7.35% and the expected return for the market portfolio is 7%?

Part 3

What is beta if the risk-free rate is 4%, the expected return 13% and the expected return for the market is 7%?

Part 4

What is the expected return for the market if the risk-free rate is 4%, beta 1 and the expected return 13%?