Suppose the risk-free return is 3.9% and the market portfolio has an expected return of 11.9%...
Suppose the risk-free return is 3.9% and the market portfolio has an expected return of 11.9% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.32. What is its expected return? (round to 2 decimal places)
Homework Answers
Expected return on stock = 3.9%
+ 0.32 * (11.9% - 3.9%)
Expected return on stock = 3.9% + 0.32 * 8%
Expected return on stock = 3.9% + 2.56% = 6.46%
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