Hi I just got your text from the office to ask you what
<span>There are a few ways that may cause me to forget the process of classical conditioning. First, I could be having retroactive interference. In this case, the newer information that I am just now learning about could be interfering with my retrieval of previous information. Second, I could be experiencing decay. This would mean that it’s been so long since I’ve learned about classical conditioning that my memory trace has not been used and I’ve started to forget about it. Finally, I also could simply have failed to process the memory in a process known as encoding failure. (One more option is that I am suffering from retrograde amnesia, but that is unlikely).</span>
Answer: Risk free rate = 1.9%
Explanation:
The Capital Asset Pricing Model allows for the calculation of the required return using the market return, beta and risk free rate.
Required return = Risk free rate + Beta * ( Market return - Risk free rate)
First find the market rate. Stock Y is uniquely positioned to help with that:
12.4% = Risk free rate + 1.0 * (Market return - Risk free rate)
12.4% = rf + Market return - rf
Market return = 12.4%
Apply this to the formula using Stock Z:
8.2% = rf + 0.6 * (12.4% - rf)
8.2% = rf + 7.44% - 0.6rf
rf - 0.6rf = 8.2% - 7.44%
0.4rf = 0.76%
rf = 0.76% / 0.4
Risk free rate = 1.9%
