Question content area top Part 1 (Capital asset pricing model) Anita, Inc. is considering the following investments. The current rate on Treasury bills is 7 percent, and the expected return for the market is 12.5 percent. Using the CAPM, what rates of return should Anita require for each individual security? Stock Beta H 0.71 T 1.62 P 0.89 W 1.37 (Click on the icon in order to copy its contents into a spreadsheet.) Question content area bottom Part 1 a. The expected rate of return for security H, which has a beta of 0.71, is enter your response here%. (Round to two decimal places.) Part 2 b. The expected rate of return for security T, which has a beta of 1.62, is enter your response here%. (Round to two decimal places.) Part 3 c. The expected rate of return for security P, which has a beta of 0.89, is enter your response here%. (Round to two decimal places.) Part 4 d. The expected rate of return for security W, which has a beta of 1.37, is enter your response here%. (Round to two decimal places.)
Question content area top Part 1 (Capital asset pricing model) Anita, Inc. is considering the following investments. The current rate on Treasury bills is 7 percent, and the expected return for the market is 12.5 percent. Using the CAPM, what rates of return should Anita require for each individual security? Stock Beta H 0.71 T 1.62 P 0.89 W 1.37 (Click on the icon in order to copy its contents into a spreadsheet.) Question content area bottom Part 1 a. The expected rate of return for security H, which has a beta of 0.71, is enter your response here%. (Round to two decimal places.) Part 2 b. The expected rate of return for security T, which has a beta of 1.62, is enter your response here%. (Round to two decimal places.) Part 3 c. The expected rate of return for security P, which has a beta of 0.89, is enter your response here%. (Round to two decimal places.) Part 4 d. The expected rate of return for security W, which has a beta of 1.37, is enter your response here%. (Round to two decimal places.)
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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Question content area top
Part 1
(Capital asset pricing model) Anita, Inc. is considering the following investments. The current rate on Treasury bills is
CAPM , what rates of return should Anita require for each individual security?
7
percent, and the expected return for the market is
12.5
percent. Using the |
Stock
|
Beta
|
|---|---|
|
H
|
0.71
|
|
T
|
1.62
|
|
P
|
0.89
|
|
W
|
1.37
|
(Click
on the icon
spreadsheet.)
Question content area bottom
Part 1
a. The expected rate of return for security H, which has a beta of
0.71,
is
enter your response here%.
(Round to two decimal places.)Part 2
b. The expected rate of return for security T, which has a beta of
1.62,
is
enter your response here%.
(Round to two decimal places.)Part 3
c. The expected rate of return for security P, which has a beta of
0.89,
is
enter your response here%.
(Round to two decimal places.)Part 4
d. The expected rate of return for security W, which has a beta of
1.37,
is
enter your response here%.
(Round to two decimal places.)Expert Solution
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