Your estimate of the market risk premium is 4%. The risk-free rate of return is 2%, and JB Hi-Fi has a beta of 1.5. According to the Capital Asset Pricing Model (CAPM) , what is its expected return?
A) 10.4%
B) 8.0%
C) 9.0%
D) 11.9%
Correct Answer:
Verified
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