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M & B 4th Edition by Dean Croushore
Edition 4ISBN: 978-1111823351M & B 4th Edition by Dean Croushore
Edition 4ISBN: 978-1111823351 Exercise 17
Suppose that the CAPM is a good model of risk in the stock market. Suppose also that the average excess return on stocks is 10 percent and that the risk-free interest rate is 1 percent. What would you expect to be the return to stocks with each of the following beta coeffi cients?
a _0.5
b 0.3
c 1.0
d 2.0
a _0.5
b 0.3
c 1.0
d 2.0
Explanation
Verified
Verified
Given the average excess return on stock...
M & B 4th Edition by Dean Croushore
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