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Hi dears,

I am reading the Elton and Gruber notes on CAPM model.

based on the Bionic turtle notes on page 9, there was this following Q

"Calculate the expected return on an asset with a Beta of 2.0

R1 = 6%

R2= 12%

B1= 0.5

B2 = 1.5"

The answer is on page 10, however, i did not know how to arrive to it

Would appreciate if someone can explain the method to me.

Appreciate your efforts

Thanks,

Hassan

I am reading the Elton and Gruber notes on CAPM model.

based on the Bionic turtle notes on page 9, there was this following Q

"Calculate the expected return on an asset with a Beta of 2.0

R1 = 6%

R2= 12%

B1= 0.5

B2 = 1.5"

The answer is on page 10, however, i did not know how to arrive to it

Would appreciate if someone can explain the method to me.

Appreciate your efforts

Thanks,

Hassan

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