(Capital Asset Pricing Model) Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently 7 percent, and the expected return for the market is 13 percent. What should be the expected rate of return for each investment (using the CAPM)? Security A B C D Beta 1.51 0.92 0.71 1.23 (Click on the icon in order to copy its contents into a spreadsheet.)

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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unit 8-8

(Capital Asset Pricing Model) Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently 7 percent, and the expected return for the market is 13 percent. What should be the expected rate
of return for each investment (using the CAPM)?
Security
A
B
C
D
Beta
1.51
0.92
0.71
1.23
(Click on the icon in order to copy its contents into a spreadsheet.)
Transcribed Image Text:(Capital Asset Pricing Model) Johnson Manufacturing, Inc., is considering several investments. The rate on Treasury bills is currently 7 percent, and the expected return for the market is 13 percent. What should be the expected rate of return for each investment (using the CAPM)? Security A B C D Beta 1.51 0.92 0.71 1.23 (Click on the icon in order to copy its contents into a spreadsheet.)
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