We learned in CAPM that the Estimated Returns of Stock is the total of Riskless rate of return, plus Beta x Market Risk Premium. In the discussion, the Riskless rate of return is usually the rate of return on short-term Treasury Bills (T- Bills). Is that always the case? Discuss.
We learned in CAPM that the Estimated Returns of Stock is the total of Riskless rate of return, plus Beta x Market Risk Premium. In the discussion, the Riskless rate of return is usually the rate of return on short-term Treasury Bills (T- Bills). Is that always the case? Discuss.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter3: Risk And Return: Part Ii
Section: Chapter Questions
Problem 9MC: What is a characteristic line? How is this line used to estimate a stocks beta coefficient? Write...
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