# Compute the expected rate of return on investment i given the followinginformation: Rf = 8%; E(RM) = 14%; βi = 1.0.b. Recalculate the required rate of return assuming βi is 1.8.25. a. Compute the expected rate of return on investment i given the followinginformation: the market risk premium is 5%; Rf = 6%; βi = 1.2.b. Compute E(RM)

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Compute the expected rate of return on investment i given the following
information: Rf = 8%; E(RM) = 14%; βi = 1.0.
b. Recalculate the required rate of return assuming βi is 1.8.
25. a. Compute the expected rate of return on investment i given the following
information: the market risk premium is 5%; Rf = 6%; βi = 1.2.
b. Compute E(RM)

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Step 1

Expected rate of return is the minimum return which the investors would require for investing in a stock. Using Capital Asset Pricing Model, this value can be determined.

Step 2

Answer: Expected rate of return on investment i is 14.00%

Step 3

b) Expected rate of return on inve...

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