assignment1 - Assignment 1 Corporate Finance II(ACTSC372...

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1 Assignment 1 Corporate Finance II (ACTSC372) Due date: Feb 4, 5:00pm. Outside MC 6016 _______________________________________________________________________ 1. Consider the following two stocks: Beta Expected Return Murck Pharmaceutical 1.4 30% Pizer Drug Corp 0.7 19% Assume that capital asset pricing model holds. Based on the CAPM, what is the risk-free rate? What is the expected return on the market portfolio? 2.