Question: The return on the market is 9 . 0 % and the risk - free rate is 2 . 5 % . The investor is
The return on the market is and the riskfree rate is The investor is conservative and his beta is
a What is the required rate of return for this investment using the CAPM approach?
b What if the is but the riskfree rate is and the market return is What is the required rate of return for this investment?
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Solution We will use the Capital Asset Pricing Model CAPM formula Ri Rf beta Rm Rf Where Ri R... View full answer
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