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

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%

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