Corporate Finance
Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
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Chapter 13, Problem 26P
Summary Introduction

To determine: The risk premium, the annual risk premium and the annual risk premium using CAPM of GE stock.

Introduction:

CAPM is abbreviated as Capital Asset Pricing Model. Expected Return is the method of finding the average anticipated probability of several diverse interest rates that are probable on a particular asset.

The issues in such persistence comprise of dissimilar market environments which also includes the beta of an asset. Beta is the risk related with a portfolio or a security in connection to the market. It is also termed as the beta coefficient; it is a method for deciding on the requirement on security or stock that may move in contrast with the market.

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