a.  Calculate the required rate of return for an asset that has a beta of 1.19​, given a​ risk-free rate of 2.7​% and a market return of 8.9​%. b.  If investors have become more​ risk-averse due to recent geopolitical​ events, and the market return rises to 12.1​%, what is the required rate of return for the same​ asset?

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter6: Risk And Return
Section: Chapter Questions
Problem 14P
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a.  Calculate the required rate of return for an asset that has a beta of
1.19​,
given a​ risk-free rate of
2.7​%
and a market return of
8.9​%.
b.  If investors have become more​ risk-averse due to recent geopolitical​ events, and the market return rises to
12.1​%,
what is the required rate of return for the same​ asset?
 
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