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Estimate expected return using capital asset pricing model

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Question: The unlevered beta of electronics firms, on average, is 1.1. The riskless rate is 6.5% and the market risk premium is 6%.

a. Estimate the expected return, using the capital asset pricing model.

b. As a venture capitalist, why might your have a target rate of return much higher than this expected return?

Reference no: EM131690054

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