According to the CAPM,what is the expected market return given an expected return on a security of 15.8%,a stock beta of 1.2,and a risk free interest rate of 5.0%?

Question

Quizplus · Accepted Answer

Using the CAPM formula: Expected Return = Risk-Free Rate + Beta * (Market Return - Risk-Free Rate). Plugging in the values: 15.8% = 5.0% + 1.2 * (Market Return - 5.0%). Solving for Market Return gives 14.0%.

According to the CAPM,what Is the Expected Market Return Given