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-   -   Capm Model (https://www.askmehelpdesk.com/showthread.php?t=155076)

  • Nov 23, 2007, 08:16 AM
    scomerford
    capm Model
    Please check on my answer to the question below:

    A stock has returns of a two year period of 12% and 6%, and market returns during the same period of 9% and 4%. The beta of the stock is:

    I came up with 1.2 on the first one above

    Given the above then,

    current T-bill rate = 7%
    expected market return = 10%
    Expected rate of return, according to the CAPM model is ?

    I came up with 10.6%

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