Determine the annual rate of return for the first option


Suppose Paycheck, Inc., has a beta of 0.77. If the market return is expected to be 13.80 percent and the risk-free rate is 6.80 percent, what is Paycheck’s rA parent can invest $10,000 into a college education fund and receive $50,000 in 18 years, or the parent can invest $10,000 into an account which earns 12% compounded annually. Determine the annual rate of return for the first option and determine which option the parent should choose.isk premium?

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Financial Management: Determine the annual rate of return for the first option
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