What is the expected return on asset A if it has a beta of 0.6,the expected market portfolio return is 15%,and the risk-free rate is 6%?

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Quizplus · Accepted Answer

The expected return on asset A 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 values: Expected Return = 6% + 0.6 * (15% - 6%) = 6% + 0.6 * 9% = 6% + 5.4% = 11.4%.

What Is the Expected Return on Asset a If It