Question

What CAPM inputs are the same for every project? What CAPM inputs are specic to your...

What CAPM inputs are the same for every project? What
CAPM inputs are specic to your project?

What asset has a beta of 1? What is the appropriate
market rate of return for a security with a beta of 1?

What asset has a beta of 0? What is the appropriate
market rate of return for a security with a beta of 0?

Do projects that have high variance, but whose risk can be
diversied away in our portfolio, need to provide more
reward?

Do projects that add more risk to investors' portfolio need
to provide more reward?

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What CAPM inputs are the same for every project? Risk free rate and Market risk premium (Market return - Risk free rate) are the same for every project.
What CAPM inputs are specific to your project? Project beta is specific to your project.
What asset has a beta of 1? Assets which are volatile same as market has beta of 1
What is the appropriate market rate of return for a security with a beta of 1? Appropriate market return for security with beta of 1 is return same as market return
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