Question: Problem 15 Intro Use the required return-beta equation from the CAPM. Part 1 What is the required return for a stock if the risk-free rate

Problem 15

Intro

Use the required return-beta equation from the CAPM.

Part 1

What is the required return for a stock if the risk-free rate is 3%, beta 1.3 and the required return for the market portfolio is 7%?

Part 2

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

Part 3

What is beta if the risk-free rate is 3%, the required return 13% and the required return for the market is 7%?

Part 4

What is the required return for the market if the risk-free rate is 3%, beta 1.3 and the required return 13%?

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