Suppose you observe the following
does it look correct29. Suppose you observe the following situation: a. Calculate the expected return on each stock. 0.10(-0.12) + 0.65(0.09) + 0.25(0.35) = 0.134 0.10(-0.05) + 0.65(0.10) + 0.25(0.21) = 0.1125 b. Assuming the capital asset pricing model holds and stock A’s beta is greater than stock B’s beta by .25, what is the expected market […]