(Capital Asset Pricing Model) The expected return for the general market is 11.5 percent, and the risk premium in the market is 7.3 percent. Tasaco, LBM, and Exxxos have betas of 0.882, 0.677, and 0.557, respectively. What are the appropriate expected rates of return for the three securities?
(Capital Asset Pricing Model) The expected return for the general market is 11.5 percent, and the risk premium in the market is 7.3 percent. Tasaco, LBM, and Exxxos have betas of 0.882, 0.677, and 0.557, respectively. What are the appropriate expected rates of return for the three securities?
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
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:(Capital Asset Pricing Model) The expected return for the general market is 11.5 percent, and the risk premium in the market is 7.3 percent. Tasaco, LBM, and Exxxos have betas of 0.882, 0.677, and 0.557, respectively. What are the appropriate expected rates of return for the three securities?
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