What is the required rate of return

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1. CAPM: If the risk-free rate is 0.04, the return of the market is 0.12, and the beta of the firm is 1.4, what is the required rate of return?

2. Suppose the call money rate is 3.1 percent, and you pay a spread of 1.5 percentage points over that. You buy 800 shares at $45 per share with an initial margin of 50 percent. One year later, the stock is selling for $49 per share, and you close out your position. What is your return assuming no dividends are paid?

Reference no: EM131815277

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