Questions
COMM_V 371 101-107 2025W1 Lecture 5 Practice Quiz
Numerical
The risk-free rate is 1% and the expected return on the market portfolio is 12%. If the CAPM holds, what is the beta on stock YMH with an expected return of 12.22%?
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Step-by-Step Analysis
We start from the CAPM formula: E[R_i] = R_f + beta_i * (E[R_m] - R_f).
- The risk-free rate R_f is 1% (0.01).
- The expected market return E[R_m] is 12% (0.12......Login to view full explanationLog in for full answers
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