(i) Potpuri Inc Stock has a beta of 1.7 and an expected return of 16.7% under CAPM. What is the expected market risk premium of Potpuri Inc. (ii) Magnolia Ind stock has the beta of 0.8 what is the expected return on the Magnolia Ind?
(i) Potpuri Inc Stock has a beta of 1.7 and an expected return of 16.7% under CAPM. What is the expected market risk premium of Potpuri Inc. (ii) Magnolia Ind stock has the beta of 0.8 what is the expected return on the Magnolia Ind?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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. The risk free rate is 7.6%.
(i) Potpuri Inc Stock has a beta of 1.7 and an expected return of 16.7% under
CAPM. What is the expected market risk premium of Potpuri Inc.
(ii) Magnolia Ind stock has the beta of 0.8 what is the expected return on the Magnolia
Ind?
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