1. What are the assumptions underlying the CAPM? Are the perfect market assumptions among them? Are there more?
2. The risk-free rate is 4%. The expected rate of return on the stock market is 7%. What is the appropriate cost of capital for a project that has a beta of 3?
3. The risk-free rate is 4%. The expected rate of return on the stock market is 12%. What is the appropriate cost of capital for a project that has a beta of 3?