Using the CAPM, calculate the expected rate of return for a share that has a beta of 2.3. The expected return on the market and risk-free rate are 6% and 5% respectively.
A) 2.3%.
B) 2.7%.
C) 7.3%.
D) 6.3%.

Name: Using the CAPM, calculate the expected rate of return for a share that has a beta of 2.3. The expected return on the market and risk-free rate are 6% and 5% respectively. A) 2.3%. B) 2.7%. C) 7.3%. D) 6.3%.
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Quizplus · Accepted Answer

Using the CAPM equation, the answer is 7.3%. E(R_i) = R_rf + B_i[E(R_m) - R_rf]

Using the CAPM, Calculate the Expected Rate of Return for a Share