What are the betas listed for companies

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What are the betas listed for these companies? Wells Fargo beta = 1.03 BM beta = 0.87 1.

1. Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on these two stocks. Assumptions and Data: Note that you will need the risk-free rate and the market risk premium. Assume a 5% market risk premium. You will use the current 2.21 yield on 10-year Treasury securities as the risk-free rate to estimate the required rate of return on stocks.

2. Compare the required return on these stocks calculated using CAPM in question #1 against their historical return over the last 52 weeks (Wells Fargo 59.99) and IBM (182.79). Is there a difference between these returns? Is this a problem? Why is there a difference?

Reference no: EM131473803

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