What is the expected return for a real estate investment fund with a Beta of 1.87,given a risk free rate of 2.7% and an expected return of 11.2% for the market?

Question

Quizplus · Accepted Answer

The expected return can be calculated using the Capital Asset Pricing Model (CAPM) formula: Expected Return = Risk-Free Rate + Beta * (Market Return - Risk-Free Rate). Plugging in the given values: Expected Return = 2.7% + 1.87 * (11.2% - 2.7%) = 2.7% + 1.87 * 8.5% = 2.7% + 15.9% = 18.6%.

What Is the Expected Return for a Real Estate Investment