You have been provided the following data on the securities of three firms and the market: Security E[Ri] s.d (Ri) Corr(Ri, Rm) Beta i Firm one _____A____ _____B____ 1.0 0.85 Firm two _____C____ 0.18 0.7 _____D____ Firm three _____E____ 0.05 _____F_____ 0.8 The market 0.10 0.04 1.2 _____G_____ Risk-free asset 0.08 0 0 0 Assume that the CAPM and SML are true. Fill in the missing values in the table. (Show the calculation process and results)

You have been provided the following data on the securities of three firms and the market: Security E[Ri] s.d (Ri) Corr(Ri, Rm) Beta i Firm one ___A _B 1.0 0.85 Firm two _C 0.18 0.7 _D Firm three _E 0.05 _F_ 0.8 The market 0.10 0.04 1.2 _G___ Risk-free asset 0.08 0 0 0 Assume that the CAPM and SML are true. Fill in the missing values in the table. (Show the calculation process and results)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 3SEQ

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Security	E[Ri]	s.d (Ri)	Corr(Ri, Rm)	Beta i
Firm one	_____A____	_____B____	1.0	0.85
Firm two	_____C____	0.18	0.7	_____D____
Firm three	_____E____	0.05	_____F_____	0.8
The market	0.10	0.04	1.2	_____G_____
Risk-free asset	0.08	0	0	0