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Manipulating CAPM Use the basic equation for the capital asset pricing model (CAPM) to work each of the following problems.

a. Find the required return for an asset with a beta of 0.90 when the risk-free rate and market return are 8% and 12%, respectively.

b. Find the risk-free rate for a firm with a required return of 15% and a beta of 1.25 when the market return is 14%.

c. Find the market return for an asset with a required return of 16% and a beta of 1.10 when the risk-free rate is 9%.

d. Find the beta for an asset with a required return of 15% when the risk-free rate and market return are 10% and 12.5%, respectively.

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  • Category:- Basic Finance
  • Reference No.:- M940099

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