MMB has common stock has a beta of 1.5. A security analyst forecasts an expected return of 15% over the next year. The market risk premium is 8% and the risk free rate is 4%. In a CAPM framework, does the analyst believe that Fenway common stock is fairly priced?
As per CAPM framework the
Return on equity= Risk free rate + Beta*( Risk Premium)
No the analyst doesn't believe that ...
The CAPM framework is assessed.