Compute the expected return rate of return

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CAPM compute the expected return rate of return for Companies A and B. Assume using the CAPM compute the expected return rate of return for Companies A and B. Assume a market risk premium of 3%, a risk-free rate of 4%, a Beta for company A of .90 and a Beta for company B of 1.3.

Using the CAPM, compute the expected rate of return for a portfolio with 25% stake in company A and a 75% stake in company B. Assume a Market risk premium of 3% and a risk-free rate of 4%.

Reference no: EM13746569

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