Assignment 2: The Capital Asset Pricing Model
cabo1789
week_2_template.xlsM2, Assign2
| Module 2, Assignment 2 | Solution: | |||||||||||
| A. | .85*.55 = | B. | RF=x% | |||||||||
| .9x*.xx = | RPrem=x% | |||||||||||
| 1.xx*.xx = | beta = .xxx | |||||||||||
| x.xx*.xx = | kreq= 6% + x%(.9xx) = x.98% | |||||||||||
| Beta = | 0 | |||||||||||
| C. | The SML Equation is: | kreq= x% + x%(.9x5) | ||||||||||
| % | ||||||||||||
| x% | ||||||||||||
| Beta | ||||||||||||
| D. | Required Return on the new plant = x% + x%(1.x) = x.x% | |||||||||||
| Since the new plant is expected to return xx% and the required return is x.4%, the project should be ???? |
M2, Assign2
SML
