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Question : Problem-solving: Calculate the capital asset pricing model's required return (k)

Problem-solving: Calculate the capital asset pricing model's required return (k) and Jensen's measure of excess return, alpha, for the following investment projects, then rank-order them from best to worst. Assume that the risk-free return, if, is 6% and the market return, im = 12%.

Project beta Expected Return

A 1.0 14%

B 1.2 20%

C 1.6 30%

D 0.8 10%