3. The CAPM suggests that securities having more systematic risk than the market should typically also earn a higher risk premium than the market, and vice versa. Considering your estimate of beta and your sample average risk premia, is it true for Xerox?

Given in keeping with CAPM proposal the safeties having additional systematic risk as the market ought to generally conjointly receive a high risk than the market, currently estimation price of beta and sample regular risk right for Xerox is:

The regular risk for (Xerox = zero.36 > 0.0124), sample regular risk for market and seeing that beta is extraordinary, additional organized risk than market threat.

Consequently, we have a tendency to embrace that safeties having additional organized than the market ought to generally earn a better risk than the market.

Yes, its undoubtedly right atleast for Xerox.

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