alleryStart learning →Using CAPM, find the expected return with risk-free rate 6%, beta 1.3 and market return 12%.
A15.6%
B7.8%
C12.0%
D13.8%
Answer & Solution
Correct answer: D. 13.8%
Expected return is 6 plus 1.3 times (12 minus 6) equals 13.8%.
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