At the beginning of 2007​ (the year the iPhone was​ introduced), Apple's beta was 1.46, and the​ risk-free rate was about 3.53%. AppleApple​'s price was ​$83.2483.24. AppleApple​'s price at the end of 2007 was ​$196.46. If you estimate the market risk premium to have been 6.79%​, did Apple's managers exceed their​ investors' required return as given by the​ CAPM? The expected return is The realized return is Did Apple​'s managers exceed their​ investors' required return as given by the​ CAPM?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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At the beginning of 2007​ (the year the iPhone was​ introduced), Apple's beta was 1.46, and the​ risk-free rate was about 3.53%. AppleApple​'s price was ​$83.2483.24. AppleApple​'s price at the end of 2007 was ​$196.46. If you estimate the market risk premium to have been 6.79%​, did Apple's managers exceed their​ investors' required return as given by the​ CAPM?

The expected return is

The realized return is

Did Apple​'s managers exceed their​ investors' required return as given by the​ CAPM?

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