Will power is comparing cost to join a gym will find silver gym cost $100 to join in $15 per month he also found out the abs of steel cost $150 to join and $12 per month well can only sign up for complete months no part of a month what is the minimum number of months needed before abs of steel is cheaper than silver

required rate of return = 0.166 = 16.6%

step-by-step explanation:

under the capital asset pricing model (capm), the required or expected rate of return for a particular security or asset is given using the formula:

required rate of return = risk-free rate + beta*(market risk premium)

we are given that;

risk-free rate = 4% = 0.04

beta = 1.4

market risk premium = 9% = 0.09

we simply plug these values into the above formula;

required rate of return = 0.04 + 1.4*(0.09)

required rate of return = 0.04 + 0.126

required rate of return = 0.166 = 16.6%

2

step-by-step explanation: