Solution of Both sum - 19948

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CAPM compute the expected return rate of return for Companies A and B. Assume

using the CAPM compute the expected return rate of return for Companies A and B. Assume a market risk premium of 3%, a risk-free rate of 4%, a Beta for company A of .90 and a Beta for company B of 1.3

 

Using the CAPM, compute the expected rate of return for a portfolio with 25% stake in company A and a 75% stake in company B. Assume a Market risk premium of 3% and a risk-free rate of 4%

 

 

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