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    Required rate of return and Capital Asset Pricing Model

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    11A-1: Assume that Rf = 5%, and Km = 10.5%. Compute Kj for the following betas
    a. 0.6
    b. 1.3
    c. 1.9

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    Solution Preview

    11A-1: Formula: Kj = Rf + β (Km - Rf)
    The formula for calculating required ...

    Solution Summary

    This post explains how to calculate the required rate of return using capital asset pricing model.

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