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Create SML graph that needs to be computer generated either through excel or any other program, reflecting a risk-free rate of 2% and the market return 7%. Company A with a beta of 0.82 and Company B with a beta of 0.88 needed to be labeled on the graph.
Required rate of return needs to be on the Y axis and the beta needs to be on the X axis
Other info to help graph problem
2% + .82 [5%] = 6.1% is the required rate of return ; Risk premium is 4.1% for beta of .82
2% + .88 [5%] = 6.4% is the required rate of return; Risk premium is 4.4% for beta of .88
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