The Treasury bill rate is 4%, and the expected return on the market portfolio is 12%. According to the capital asset pricing model: a. What is the risk premium on the market? b. What is the required return on an investment with a beta of 1.5? (Do not round intermediate calculations. Enter your answer as a whole percent.) d. If the market expects a return of 11.2% from stock X, what is its beta? (Do not round intermediate calculations. Round your answer to 1 decimal place.)

Q: The Treasury bill rate is 4%, and the expected return on the market portfolio is 12%. Using the…

A: Risk free rate = 4% Market return = 12% Beta of stock X = 1.5

Q: Suppose the rate of return on short-term government securities (perceived to be risk-free) is about…

A: a) Given: Expected rate of return on portfolio E(RP) = 12% Portfolio beta = 1 Risk free rate =5%…

Q: need help with all

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Q: The treasury bill rate is 4%, and the expected return on the market portfolio is 14%. According to…

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Q: CAPM The Treasury bill rate is 4%, and the expected return on the market portfolio is 12%. Using the…

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A: Risk premium = Expected return on market portfolio - Treasury bill rate Risk premium on investment =…

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A: Part (a): Calculation of risk premium on the market: Answer: Risk premium is 11%

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Q: The Treasury bill rate is 6%, and the expected return on the market portfolio is 12%. According che…

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A: Weight in Risk Portfolio = 40% Therefore, Weight of X = 40% * 60%  = 24% Weight of Y = 40% * 40%  =…

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A: 1. Risk premium =expected return on the market  -  Treasury bill rate Risk premium = 11.1% - 4.9%…

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A: Since you have asked a question with multiple parts, we will solve the first 3 parts for you. Please…

Q: Suppose the rate of return on short-term government securities (perceived to be risk-free) is about…

A: according to CAPM model: rs=rf+βs×rm-rfwhere,rf= risk free returnrm= market returnβs= beta

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Q: The risk-free rate is 4 per cent. The expected market rate of return is 12 per cent. If you actually…

A: Solution-Risk free rate Rf=4%Expected market rate of return Rm=12%Beta=1.0

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A: Dear Student as per Bartleby's answering guideline we can not answer more than three sub-parts. to…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.