According to the CCAPM,if the expected return on the market return is 7% and the risk-free rate is 5%,the expected return on a portfolio with a consumption beta of 1.5 is 3.1%.

Name: According to the CCAPM,if the expected return on the market return is 7% and the risk-free rate is 5%,the expected return on a portfolio with a consumption beta of 1.5 is 3.1%.
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Quizplus · Accepted Answer

Similarly to the CAPM,we can calculate the return on a portfolio using the consumption beta.E(R)= 0.05 + 1.5(0.07 - 0.05)= 0.031 = 3.1%.

According to the CCAPM,if the Expected Return on the Market