Problem 8-10

What is the required return on an investment with a beta of 1.5 if the risk-free rate is 2.3 percent and the return on the market is 8.5 percent? Round your answer to two decimal places.

%

If the expected return on the investment is 12.1 percent, what should you do?

Since the expected return -Select-is greateris lessItem 2 than the required return, the individual -Select-shouldshould notItem 3 make the investment.