capm - assuming risk. However, only nondiversifiable risk...

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a. risk free rate+ (Market Return - Risk-Free Rate) X Beta = 6% + 1.2 (16% - 6%) = 18% b. The 18 percent "fair rate" compensates the investor for the time value of money and for
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Unformatted text preview: assuming risk. However, only nondiversifiable risk is being considered, which is appropriate....
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This note was uploaded on 08/22/2011 for the course ACCOUNTING 201 taught by Professor Stevejoseph during the Winter '11 term at Aarhus Universitet.

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