CUNYFirst # Last Name:
First Name:
2. The life of a certain type of engine is normally distributed with a mean of 10 years, and a
standard deviation of 1.5 years.
(1) If one engine is randomly selected, what is the probability that the life of this engine
is between 8 and 13 years?
What are the parameters?

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%

25/6 hope it : )

step-by-step explanation: