Suppose that in the year 2010, the cost of a compact car averaged $14200 and that in 2013, the cost averaged $15700. Assuming that the relationship between year xx and cost yy is linear, develop a formula for predicting the average cost of a compact car in the future. Let the variable xx be the years since 2010. Be sure to use the lower case variables xx and yy. . What do you predict the average cost of a compact car will be in the year 2015? Note: You can earn partial credit on this problem.

exactly you go it

step-by-step explanation:

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%