equity-risk-premium
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J
question about CAPM
why is correlation included to solve the problem? I cant see anything in the notes when we multiply the two terms x correlation? Beta (i,M) = covariance(i, M)/variance(M) = 24%*15%*0.70/15%^2 = 1.12 <<- must know all of these steps! CAPM: E[R(i)] = Rf + Beta (i,M)*[R(M) - Rf] = 3% +...- JamesVU2000
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- capital-asset-pricing-model capm capm elton elton equity-risk-premium returns
- Replies: 7
- Forum: P1.T1. Foundations of Risk (20%)