Question: (Using the CAPM to find expected returns) Breckenridge, Inc., has a beta of .85. If the expected market portfolio retum is 10.5 percent and the

(Using the CAPM to find expected returns) Breckenridge, Inc., has a beta of .85. If the

expected market portfolio retum is 10.5 percent and the risk-free rate is 3.5 percent, what is the appropriate expected return of Breckenridge (using the CAPM)?

18. (Using the CAPM to find expected returns) CSB, Inc., has a beta of .765. If the ex pected market portfolio return is 10.5 percent and the risk-free rate is 3.5 percent, what is the appropriate expected rate of return of CSB (using the CAPM)? 19. (Using the CAPM to find expected returns) The expected return for the general market

portfolio is 10.3 percent, and the risk premium in the market is 5.3 percent. Tasaco,

LBM, and Exxos have betas of .864, 693, and .575, respectively. What are the

appropriate expected rates of return for the three securities?

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