Question: Manipulating CAPM Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems. a. Find the required return
Manipulating CAPM Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems. a. Find the required return for an asset with a beta of 1.99 when the risk-free rate and market return are 9% and 14%, respectively. b. Find the risk-free rate for a firm with a required return of 8.352% and a beta of 0.48 when the market return is 10%. c. Find the market return for an asset with a required return of 6.418% and a beta of 0.45 when the risk-free rate is 5%. d. Find the beta for an asset with a required return of 9.648% when the risk-free rate and market return are 5% and 10.6%, respectively. a. The required return for an asset with a beta of 1.99 when the risk-free rate and market return are 9% and 14%, respectively, is %. (Round to two decimal places.) b. The risk-free rate for a firm with a required return of 8.352% and a beta of 0.48 when the market return is 10% is %. (Round to two decimal places.) C. The market return for an asset with a required return of 6.418% and a beta of 0.45 when the risk-free rate is 5% is %. (Round to two decimal places.) d. The beta for an asset with a required return of 9.648% when the risk-free rate and market return are 5% and 10.6%, respectively, is - (Round to two decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
