Serenity Parts is considering a new project. They believe that the project has a beta of 2.00. The T-bill rate is 1.50% (risk-free rate) and the S&P 500 return (which represents "market") is 12.00%. What is the appropriate return on the new project? O 25.50% O 12.00% O 26.25% O 24.00%
Serenity Parts is considering a new project. They believe that the project has a beta of 2.00. The T-bill rate is 1.50% (risk-free rate) and the S&P 500 return (which represents "market") is 12.00%. What is the appropriate return on the new project? O 25.50% O 12.00% O 26.25% O 24.00%
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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![Serenity Parts is considering a new project. They believe that the
project has a beta of 2.00. The T-bill rate is 1.50% (risk-free rate) and
the S&P 500 return (which represents “market") is 12.00%. What is
the appropriate return on the new project?
25.50%
12.00%
26.25%
24.00%
22.50%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F382be7de-55e9-4cfc-ab00-7e06819e5c1e%2F4bae84b4-0272-4b63-ac85-cba8833e05ef%2Fem780o7_processed.png&w=3840&q=75)
Transcribed Image Text:Serenity Parts is considering a new project. They believe that the
project has a beta of 2.00. The T-bill rate is 1.50% (risk-free rate) and
the S&P 500 return (which represents “market") is 12.00%. What is
the appropriate return on the new project?
25.50%
12.00%
26.25%
24.00%
22.50%
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