Rate of interest was used in present value computation

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Reference no: EM132006537

1. According to the CAPM, what is the market risk premium given an expected return on a security of 13.6%, a stock beta of 1.2, and a risk-free interest rate of 4%?

2. Your firm has been told that it needs $100,000 today to fund a $150,000 expansion project 6 years from now. What rate of interest was used in the present value computation?

3. What is the effective annual rate of 20 percent compounded quarterly?

Reference no: EM132006537

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