Due to smoking a terminally ill patient loses approximately 2% of his lung capacity every 1 month at this rate begining at 100% capacity what will the patients lung capacity be in one year (12 months) remeber the formula for exponential decay is y=a(1-r)^x a. 69.4%
b. 76.0%
c. 88.6%
d. 78.5%

details

step-by-step explanation:

4.08%

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%