Question 24 Morning Exam for CFAI.
Answer “Accoridng to CAPM, expected return of PSMG = 2% + 1.2 (12%-2%) or 12%. Because expected return is also 12%, stock is fairly valued.”
When i calculated that, I get 14%?
Question 24 Morning Exam for CFAI.
Answer “Accoridng to CAPM, expected return of PSMG = 2% + 1.2 (12%-2%) or 12%. Because expected return is also 12%, stock is fairly valued.”
When i calculated that, I get 14%?
Yes, you are right. This was one of the answers posted/corrected in the Errata.
Yes the answer is B.