The Treasury bill rate is 7%, and the expected return on the market portfolio is 12%. According

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The Treasury bill rate is 7%, and the expected return on the market portfolio is 12%. According to the capital asset pricing model:

a.What is the risk premium on the market?

b.What is the required return on an investment with a beta of 1.6?(Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

c.If an investment with a beta of 0.6 offers an expected return of 8.0%, does it have a positive or negative NPV?

d.If the market expects a return of 10.6% from stock X, what is its beta?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Posted Date: May 19, 2024 12:01 AM

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The Treasury bill rate is 7%, and the expected return on the market portfolio is 12%. According

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