What is the required rate of return on an investment

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The Treasury bill rate is 3% and the market portfolio return is expected to be 12.5%.

Required:

Problem (a) What is the market risk premium?

Problem (b) What is the required rate of return on an investment that has a beta of 1.8?

Problem (c) If the required rate of return on an investment is 12 percent, what is its beta?

Problem (d) If an investment with a beta of 1.2 is expected to give a return of 14 percent, would you accept it?

Reference no: EM132669074

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