Question 2
Data for company X and Y are given below. The T-bill rate is
3.5% and the market risk premium is 8%.
Company
Company X
Company Y
Forecasted return
13%
12%
Standard
deviation
of returns
9%
11%
Beta
1.4
0.9
required
What would be the fair return for each company according to the
capital asset pricing model (CAPM)?
Question 2 Data for company X and Y are given below. The T-bill rate is 3.5% and the market risk premium is 8%. Company
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Question 2 Data for company X and Y are given below. The T-bill rate is 3.5% and the market risk premium is 8%. Company
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