Solution-Expected return on the market

Expected return on the market

Reference no: EM132079492

A zero-coupon bond has a beta of 0.15 and promises to pay $5,000 next year with a probability of 96%, $1,000 with a probability of 2%, and there is a 2% probability of total default. One-year Treasury securities are yielding 4% and the expected return on the market is 10%.

Reference no: EM132079492

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Expected return on the market

Reference no: EM132079492

Reference no: EM132079492

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