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December 3, 2014 at 8:32 am #216683
sonia
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risk free rate is 6 % and the require rrturn on security with a beta factor 1.2 is 15.6%
what is the required annual rate of return on the market portfolio ?
plz solve this and explain this working
December 3, 2014 at 8:49 am #216693
John Moffat
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req return = risk free + beta (mkt – risk free)

15.6 = 6 + 1.2 (mkt – 6)

9.6 = 1.2 mkt – 7.2

1.2 mkt = 16.8

mkt = 16.8 / 1.2 = 14%
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