The ordinary shares of Mumford Quilt Company have a beta of 1.1. If the expected risk-free return is 4.5 percent and the market offers a premium of 6.5 percent over the risk-free rate, using the CAPM what is the expected return on Mumford Quilts' ordinary shares?
The ordinary shares of Mumford Quilt Company have a beta of 1.1. If the expected risk-free return is 4.5 percent and the market offers a premium of 6.5 percent over the risk-free rate, using the CAPM what is the expected return on Mumford Quilts' ordinary shares?
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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- The ordinary shares of Mumford Quilt Company have a beta of 1.1. If the expected risk-free return is 4.5 percent and the market offers a premium of 6.5 percent over the risk-free rate, using the CAPM what is the expected return on Mumford Quilts' ordinary shares?
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