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Yes. If on the y axis you have excess returns, then the intercept of the line is zero. This are the implications of the CAPM model. E.g. for the SML: $E[R_i,t^e]=\beta \lambda_t$, where $R_i,t^e$ is the excess return on stock $i$ at time $t$ and $\lambda$ is the market price of risk.


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I think you are on the right track... To double check I tried to get the Monthly return by using the following formula: Monthly Return = [(1 + Annual Rate)^(1/12)]-1 by using this formula with the stated 3% Annual Return, the Investor receives approximately 0.25% per month....



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