Assume that the risk-free rate is 6% and the market risk premium is 3%.
What is the required return for the overall stock market? Round
your answer to two decimal places.
%
What is the required rate of return on a stock with a beta of
1.4? Round your answer to two decimal places.
%
market risk premium=market rate-risk free rate
market rate=6+3=9%
Required rate=risk free rate+beta*(market rate-risk free rate)
=6+1.4*(9-6)
=10.2%
Assume that the risk-free rate is 6% and the market risk premium is 3%. What is...
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