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CastrobyBest ResponseYou've already chosen the best response.1
a) 2 b) 12.5 Use the Security market line(SML)formula. http://en.wikipedia.org/wiki/Security_market_line
 2 years ago

aama100Best ResponseYou've already chosen the best response.0
can you show me how did you get the final answers please ?
 2 years ago

CastrobyBest ResponseYou've already chosen the best response.1
I used the Security Market Line equation. E(Rb) = Rf + beta * [E(Rm)Rf] E(Rb) is the expected return on stock b Rf Risk free rate E(Rm) Expected Market return [E(Rm) Rf] is also called market risk premium Just use algebra to get the value of the unknown from the equation
 2 years ago
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