Evaluate the risk premium on the market

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Reference no: EM132032444

The Treasury bill rate is 4.1%, and the expected return on the market portfolio is 10.7%. Use the capital asset pricing model.

a. What is the risk premium on the market? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

Risk premium %

b. What is the required return on an investment with a beta of 1.4? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Required return %

c. If an investment with a beta of .46 offers an expected return of 8.3%, does it have a positive NPV?

No
Yes

d. If the market expects a return of 11.0% from stock X, what is its beta? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Beta

Reference no: EM132032444

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