Problexe $4$

$E(r_p)=7\%$

${}_p=10\%$

$r_F=4\%$

${}_M=22\%$

$$ Accordiug to CAPM what is the expected retorn

of a security with a peta of $0\mathrm{.}55?$ secunty $x.$

$x$:$,\frac{E(r_x)}{E(r_x)}=4+0\mathrm{.}55*MRP=4+0\mathrm{.}55*MRP=r_F+{}_x(E(r_M)-r_F)$

P $7\%=4\%+{}_P*MRP$

Solve for MRP in this probleul $($hint:

use revula for peta from notes thot relotes it

to ${}_p$ and ${}_M)$ and use MRP in CAPM eg$.$

for security $x$ to solve for $E(r_x)$