How to solve capital asset pricing model exam questions (missing CAPM variables)
This video provides a step-by-step guide to solving Capital Asset Pricing Model (CAPM) questions in finance, focusing on practical applications and problem-solving strategies. It begins by introducing the importance of using formula sheets for CAPM-related problems. The video then walks through identifying key variables for two companies, Hakane Inc. and Sani Ltd., to calculate their required rates of return. Using Hakane Inc.’s data, the video explains how to address missing pieces in the CAPM formula to solve for Sani Ltd.'s required return, including finding the market risk premium. The tutorial concludes by presenting the final answer for Sani Ltd.'s required return (14.13%) and encourages viewers to continue building their understanding of financial concepts. This is an ideal resource for business students and professionals looking to sharpen their CAPM problem-solving skills.