Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.90
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Question:
Suppose you observe the following situation: |
Security | Beta | Expected Return | ||||
Pete Corp. | 1.90 | .200 | ||||
Repete Co. | 1.59 | .173 | ||||
What is the risk-free rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) |
Risk-free rate | % |
Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? |
Related Book For
Corporate Finance Core Principles and Applications
ISBN: 978-1259289903
5th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
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