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A project under consideration has an internal rate of return of 13% and a beta of...

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Finance

A project under consideration has an internal rate of return of13% and a beta of 0.4. The risk-free rate is 3%, and the expectedrate of return on the market portfolio is 13%.


a. What is the required rate of return on theproject? (Do not round intermediate calculations. Enteryour answer as a whole percent.)


b. Should the project be accepted?

  • Yes

  • No


c. What is the required rate of return on theproject if its beta is 1.50? (Do not round intermediatecalculations. Enter your answer as a whole percent.)


d. Should the project be accepted?

Answer & Explanation Solved by verified expert
4.2 Ratings (680 Votes)
Information providedInternal rate of return 13Beta 04Risk free rate 3Expected return on the market portfolio 13aThe required return on the    See Answer
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Transcribed Image Text

A project under consideration has an internal rate of return of13% and a beta of 0.4. The risk-free rate is 3%, and the expectedrate of return on the market portfolio is 13%.a. What is the required rate of return on theproject? (Do not round intermediate calculations. Enteryour answer as a whole percent.)b. Should the project be accepted?YesNoc. What is the required rate of return on theproject if its beta is 1.50? (Do not round intermediatecalculations. Enter your answer as a whole percent.)d. Should the project be accepted?

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