NEED A PERFECT PAPER? PLACE YOUR FIRST ORDER AND SAVE 15% USING COUPON:

4.8/5

solution

The risk free rate is 3% and you have two risky assets, A and B. The expected return of the risky assets A is 10%. The expected return of B is 13%. Asset B is 25% more risky than asset A (as measured by the common factor).

Note that the two assets are not correctly priced according to CAPM.
(a) What should be the risk free rate so that the two assets are correctly priced?
(b) What should the difference in risk between the two assets be so that the assets are correctly priced?

Please show your calculation process and explain the answer in details.

Solution:

15% off for this assignment.

Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!

Why US?

100% Confidentiality

Information about customers is confidential and never disclosed to third parties.

Timely Delivery

No missed deadlines – 97% of assignments are completed in time.

Original Writing

We complete all papers from scratch. You can get a plagiarism report.

Money Back

If you are convinced that our writer has not followed your requirements, feel free to ask for a refund.

WeCreativez WhatsApp Support
Our customer support team is here to answer your questions. Ask us anything!