What is the equation in point-slope form of the line passing through (3, 6) and (−2, 1)?

a. y + 6 = 1(x + 3)
b. y + 1 = −1(x + 2)
c. y − 6 = −1(x + 3)
d. y − 6 = 1(x − 3)

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%