Using the CAPM to find expected​ returns) Sante Capital operates two mutual funds headquartered in​ Houston, Texas. The

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answerhappygod
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Using the CAPM to find expected​ returns) Sante Capital operates two mutual funds headquartered in​ Houston, Texas. The

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Using the CAPM to find expected​ returns) Sante Capital
operates two mutual funds headquartered in​ Houston, Texas.
The firm is evaluating the stock of four different firms for
possible inclusion in its fund holdings. As part of
their​ analysis, Sante's managers have asked their junior
analyst to estimate the​ investor-required rate of return on
each​ firm's shares using the CAPM and the
following​ estimates: The rate of interest on​ short-term
U.S. Treasury securities is currently
2
​percent, and the expected return for the market portfolio
is
11
percent. What should be the expected rates of return for
each​ investment?
Security
Beta
A
1.47
B
0.83
C
1.13
D
0.95
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