BBASED ON THE CAPM THE PORTFOLIO SHOULD EARN
113) B
Based on the CAPM the portfolio should earn: ERP = .05 + (1.5)(.15 - .05) = .20.
On a risk adjusted basis this portfolio is on the SML and is thus earning the proper risk adjusted rate of
return.
113) B
Based on the CAPM the portfolio should earn: ERP = .05 + (1.5)(.15 - .05) = .20.
On a risk adjusted basis this portfolio is on the SML and is thus earning the proper risk adjusted rate of
return.