CAPM (Capital Asset Pricing Model)
Not what you're looking for?
Propose we only have the information of beta and expected return, if we know the value of the risk-free-rate, can we determine which one of the following stocks is priced higher.
Stock A : Beta 1.08, Expected Return 12.8%
Stock B : Beta 0.66, Expected Return 9.6%
Purchase this Solution
Solution Summary
We use CAPM (Capital Asset Pricing Model) to determine which one of the stocks is priced higher.
Solution Preview
CAPM (Capital Asset Pricing Model) gives
r(required return) = rf (RFR) + beta x MRP (Market Risk Premium)
So, there are 3 variables (RFR, beta and ...
Purchase this Solution
Free BrainMass Quizzes
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.