Thursday, July 27, 2017

Fundamental CAPM questions


A couple questions about the CAPM model:




  1. If I only know the riskfree rate and expected market return, how do I solve for $\beta$ ?





  2. Given the stock's variance, how do I solve the percentage of it that is due to market risk and how do I interpret this?




I searched this question through google, but I cannot find reasonable answer. Please help me! Thanks in advance for your help.




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