If the risk free rate is 2 %, the expected return on the market portfolio is 12% and the beta of Stock B is 1.1 , what is the required rate of return for Stock B according to the Capital Asset Pricing Model (CAPM)? (Round your answer rounded to one decimal place and record without a percent sign).
Debt is often used in the purchase of commercial real estate assets. Explain the terms positive and negative financial leverage. Describe how the returns to an investor change as the loan to value ratio changes. Also, provide an example to show how higher returns underleverage are compensation for the higher volatility of the return on equity.