The answer is correct i.e. 40%
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Linto Joe Varghese
Student
Ezhamkulam
India
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Original Message:
Sent: 05-07-2024 01:34 AM
From: Linto Joe Varghese
Subject: CMA Exam Support Error?
Should be an error
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Linto Joe Varghese
Student
Ezhamkulam
India
Original Message:
Sent: 05-06-2024 09:24 AM
From: Binoy Chacko
Subject: CMA Exam Support Error?
Required Rate of return as per CAPM = Risk free rate of return + beta * Market risk premium
=10 % + 2* 15%
=40%
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Binoy Chacko
Controller
AINKKHALID
Qatar
Original Message:
Sent: 05-05-2024 07:33 AM
From: Taaha Hasnain
Subject: CMA Exam Support Error?
Based on an analysis of two firms with operations similar to project X, Kochar has determined that the project's beta is 2.0. The risk-free rate is 10% and the market risk premium is 15%.
What should be the answer here? In Exam support, it says 20%, but as market risk premium already has risk free rate subtracted from it, shouldn't the answer be 40%?