Expected rate=risk free rate+Beta*market risk premium
10.2=4.1+Beta*7.2
Beta=(10.2-4.1)/7.2
=0.8472(Approx).
14. Using CAPM (L01, 4) A stock has an expected return of 10.2 percent, the risk-free...
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16. Using CAPM A stock has an expected return of 10.2 percent and a beta of .91, and the expected return on the market is 10.8 percent. What must the risk-free rate be?
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A stock has an expected return of 8 percent, its beta is 0.5, and the risk-free rate is 3.6 percent. The expected return on the market must be Question 2 options: 10.2% 14.5% 15.2% 11.1% 12.4%
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