Regain Berhad has RM15,000 and wanted to invest RM8,000 in Stock AA and the remaining in...

  

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Regain Berhad has RM15,000 and wanted to invest RM8,000 in Stock AA and the remaining in Stock AAA. The risk-free rate is 5% and the market premium is 2%. If the beta for Stock AA is 0.8 and Stock AAA is 1.2. Using CAPM, calculate expected return for: Stock AA 11. 111. Stock AAA Portfolio (3 marks) (3 marks) (5 marks) Based on the information of Stock AA where the beta is 0.8 and risk-free rate is 5%, draw the security market lines (SML) to show the movement SML when there is 2% inflation premium. Regain Berhad has RM15,000 and wanted to invest RM8,000 in Stock AA and the remaining in Stock AAA. The risk-free rate is 5% and the market premium is 2%. If the beta for Stock AA is 0.8 and Stock AAA is 1.2. Using CAPM, calculate expected return for: Stock AA 11. 111. Stock AAA Portfolio (3 marks) (3 marks) (5 marks) Based on the information of Stock AA where the beta is 0.8 and risk-free rate is 5%, draw the security market lines (SML) to show the movement SML when there is 2% inflation premium.

Answer rating: 100% (QA)

The Capital Asset Pricing Model CAPM can be used to calculate the expected return on an investment The formula for CAPM is Expected Return RiskFree Ra... View the full answer