•CapitalAssetPricingModel(CAPM):)(βFMiFiRRRR •Assumebi=0,thentheexpectedreturnisRF.•Assumebi=1,thenMiRR Expectedreturnonasecurity=Risk-freerate+Betaofthesecurity×MarketriskpremiumCAPMSample•Astockhasabetaof.92andanexpectedreturnof10.3percent.Arisk-freeassetcurrentlyearns5percent–Whatisthe...