if you could show work please Manipulating CaPM Use the basic equation for the c

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if you could show work please

Manipulating CaPM Use the basic equation for the capital asset pricing model (CaPM) to work each of the following problems. Find the required return for an asset with a beta of 0. 98 when the risk-free rate and market return are 3% and 5%, respectively. Find the risk-free rate for a firm with a required return of 10. 28% and a beta of 1. 35 when the market return is 9%. Find the market return for an asset with a required return of 16. 91% and a beta of 1. 56 when the risk-free rate is 10%. Find the beta for an asset with a required return of 10. 12% when the risk-free rate and market return are 7% and 11. 1%, respectively.

Explanation / Answer

Hi, If you like my answer rate me lifesaver first...that way only I can earn points. Thanks CAPM model Required return = Risk Free + beta * (Market return - Risk free) a) reqd. return = 3% + 0.98*(5% -3 %) = 4.96% b) let risk free be rf 10.28 = rf + 1.35 * (9% - rf), or rf = 5.34% c) let market return be rm 16.91% = 10% + 1.56* ( rm - 10%), or rm = 14.43% d) let beta be b 10.12% = 7% + b *(11.1% - 7%) or b = 0.76

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