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Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the requied returm, (Click on the icon located on the top-ight comer of the data table below in order to copy its contents into a spreadsheet.) Risk-free rate, RF 8% Market return, m 16% Beta, b The required return for the asset is (Round to two decimal places) Enter your answer in the answer box 2 12/2/2018
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Answer #1

Required rate of return

= Risk free rate+ Beta(Market rate of return - Risk free rate of return )

= 8% + 1.3(16%-8%) = 8%+1.3*8%

= 8% + 10.4% = 18.4%

The required rate of return for the asset is 18.4%.

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