An investment has a beta of 1.0. The risk free rate is 2% and current market return is 8%?
What is the required return?
So, if you were able to guarantee a return of 7% on this investment, should you go forward with the investment?
What is the required return if beta is .8 instead? So, if you were able to guarantee a return of 7% on this investment, should you go forward with the investment?