Problem $8-8$ CAPM

Suppose that the Treasury bill rate is $5\%$ rather than the $2\%.$ Assume that the expected return on the market stays at $9\%.$ Use the

following information.

a$.$ Calculate the expected return from Johnson & Johnson.

Note: Do not round intermediate calculations. Enter your answer as a percent rounded to $2$ decimal places.

b$.$ Find the highest expected return that is offered by one of these stocks.

Note: Do not round intermediate calculations.Round your "Sensitivity" answers to $2$ decimal places and enter your

"Expected risk premium" answer as a percent rounded to $2$ decimal places.

c$.$ Find the lowest expected return that is offered by one of these stocks.

Note: Do not round intermediate calculations. Round your "Sensitivity" answers to $2$ decimal places and enter your

"Expected risk premium" answer as a percent rounded to $2$ decimal places.

d$.$ Would U$.$S$.$ Steel offer a higher or lower expected return if the interest rate were $5\%$ rather than $2\%?$ Assume that the expected

market return stays at $9\%.$

Note: Round your "Sensitivity" answers to $2$ decimal places and enter your "Expected risk premium" answer as a percent

rounded to $2$ decimal places.

e$.$ Would Coca$-$Cola offer a higher or lower expected return if the interest rate were $8\%?$

a$.$ Expected return

b$.$ Highest Expected return

c$.$ Lowest expected return

d$.$ Would U$.$S$.$ Steel offer a higher or lower expected return?

e$.$ Would Coca$-$Cola offer a higher or lower expected return?