Question: Problem 3: Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. Company Forecasted return Standard deviation

Problem 3: Here are data on two companies. The T-bill rate

Problem 3: Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. Company Forecasted return Standard deviation of returns "$1 Discount Store" 12% 8% Everything $5" 11% 10% Beta 1.5 1.0 What would be the fair return for each company according to the capital asset pricing model (CAPM)? | Problem 4: Characterize each company in the previous problem as underpriced, overpriced, or properly priced

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