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Suppose you observe the following, and that the CAPM holds: Security Beta Venus Corp. 1.85 Mars Corp. 1.54 1. a) Compute the Expected Return on the Market 2. b) Compute the Risk-free Rate of Interest. Expected Return 0.195 0.168 Please show all work clearly to get partial points. Without work, you will get a zero, even if your answer is correct.

Suppose you observe the following, and that the CAPM holds: Security Beta Venus Corp. 1.85 Mars Corp. 1.54 1. a) Compute the Expected Return on the Market 2. b) Compute the Risk-free Rate of Interest. Expected Return 0.195 0.168 Please show all work clearly to get partial points. Without work, you will get a zero, even if your answer is correct.

Essentials Of Investments
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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Suppose you observe the following, and that the CAPM holds: Security Beta Venus Corp. 1.85 Mars Corp. 1.54 1. a) Compute the Expected Return on the Market 2. b) Compute the Risk-free Rate of Interest. Expected Return 0.195 0.168 Please show all work clearly to get partial points. Without work, you will get a zero, even if your answer is correct.
Transcribed Image Text:Suppose you observe the following, and that the CAPM holds: Security Beta Venus Corp. 1.85 Mars Corp. 1.54 1. a) Compute the Expected Return on the Market 2. b) Compute the Risk-free Rate of Interest. Expected Return 0.195 0.168 Please show all work clearly to get partial points. Without work, you will get a zero, even if your answer is correct.
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