Bob climbs a mountain, but starts below sea level. he climbs the same number of feet each hour. if the function showing his elevation for any hour is y = 850x – 325, what elevation, in feet, did he start at?
a.
325
b.
850
c.
–850
d.
–325

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%