Problem:
The expected return for the general market is 12.8 percent, and the risk premium in the market is 9.3%. Tasaco, LBM, and Exxos have betas of 0.864, 0.693 and 0.575, respectively.
Required:
Question: What are the corresponding required rates of return for the three securities?
Note: Please answer in proper manner and show all computations.