- 12 Assume That The Capm Is A Good Description Of Stock Price Returns The Market Expected Return Is 8 With 10 Volatil 1 (27.91 KiB) Viewed 12 times
12. Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 10% volatil
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12. Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 10% volatil
12. Assume that the CAPM is a good description of stock price returns. The market expected return is 8% with 10% volatility and the risk-free rate is 2%. New news arrives that does not change any of these numbers, but it does change the expected return of the following stocks: Expected Return Volatility Beta Green Leaf 14.0% 25% 1.65 NatSam 11.9% 37% 1.70 HanBel 11.0% 28% 0.85 Rebecca Automobile 9.0% 31% 1.35 a. At current market prices, which stocks represent buying opportunities? b. On which stocks should you put a sell order in?