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The CAPM model was developed by Treynor, Sharpe, Linter, and Mossin in the early 1960s. According to our authors the CAPM model provides a prediction of the relationship an investor should observe between the risk of an asset and its expected return. Calculate the expected rate of return for MKA stock using the CAPM model.

Risk free rate: 6%
MKA stock beta: 1.35
Equity Risk Premium = 12%

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  • Category:- Basic Finance
  • Reference No.:- M9208179

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