Your estimate of the market risk premium is 4%. The risk-free rate of return is 4%, and General Motors has a beta of 1.3. According to the Capital Asset Pricing Model (CAPM), what is its expected return? A. 8.7% B. 8.3% C. 9.7% D. 9.2%

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
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Your estimate of the market risk premium is 4%. The risk-free rate of return is 4%, and General Motors has a beta of 1.3. According to the Capital Asset Pricing Model
(CAPM), what is its expected return?
A. 8.7%
B. 8.3%
C. 9.7%
D. 9.2%
Transcribed Image Text:Your estimate of the market risk premium is 4%. The risk-free rate of return is 4%, and General Motors has a beta of 1.3. According to the Capital Asset Pricing Model (CAPM), what is its expected return? A. 8.7% B. 8.3% C. 9.7% D. 9.2%
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