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The Treasury bill rate is 5%, and the expected return on the market portfolio is 12%....

The Treasury bill rate is 5%, and the expected return on the market portfolio is 12%. On the basis of Capital Asset Pricing Model:

  1. What is the risk premium of the market?
  2. What is the risk premium of an investment with a beta of 1.5?
  3. What is the required return of an investment with a beta of 1.5?
  4. If an investment has a beta of .8 offers an expected return of 11% (think of it as its IRR), does it have a positive NPV?
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