alleryStart learning →With a risk-free rate of 5 percent, equity premium 6 percent and beta 0.8, what is the CAPM required return?
A10.8%
B9.8%
C11%
D4.8%
Answer & Solution
Correct answer: B. 9.8%
Required return = 5% + 0.8 x 6% = 5% + 4.8% = 9.8%.
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