1. draw a model to show 1/6. then divide the model into twice as many parts to find an equivalent fraction.

2. multiply the numerator and the denominator of 1/6 by 2.

3. why does it make sense that the fractions in the problems you wrote in numbers 1 and 2 are the same?

required rate of return = 0.166 = 16.6%

step-by-step explanation:

under the capital asset pricing model (capm), the required or expected rate of return for a particular security or asset is given using the formula:

required rate of return = risk-free rate + beta*(market risk premium)

we are given that;

risk-free rate = 4% = 0.04

beta = 1.4

market risk premium = 9% = 0.09

we simply plug these values into the above formula;

required rate of return = 0.04 + 1.4*(0.09)

required rate of return = 0.04 + 0.126

required rate of return = 0.166 = 16.6%