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aama100

  • 4 years ago

Beta Computation Question - Please See the attachment

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  1. aama100
    • 4 years ago
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  2. Castroby
    • 4 years ago
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    a) 2 b) 12.5 Use the Security market line(SML)formula. http://en.wikipedia.org/wiki/Security_market_line

  3. aama100
    • 4 years ago
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    can you show me how did you get the final answers please ?

  4. Castroby
    • 4 years ago
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    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

  5. aama100
    • 4 years ago
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    Thank you!

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