Solve for the required rate of return-cost of capital

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Reference no: EM131969491

1. Using the Capital Asset Pricing Model (CAPM), solve for the required rate of return/cost of capital for a stock with the following attributes: Stock's beta = 1.8 Historic stock market return = 12.2% Treasury bill yield = 1.55%

2. If you deposit your money in a bank account that pays 6.8% interest compounded weakly, what is the effective annual rate (EAR)? Please, explain in detail

Please round your answer to the fourth decimal (e.g. 0.0000)

Reference no: EM131969491

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