Using the formula for the security market line formula 21-7


Using the formula for the security market line (Formula 21-7), if the risk-free rate (RF) is 6%, the market rate of return (KM) is 12%, and the beta (bi) is 1.2, compute the anticipated return for stock i (Ki).

20.4%

16.33%

13.64%

13.2%

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Financial Management: Using the formula for the security market line formula 21-7
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