A stock has an expected return of 9%. What is its beta? Assume the risk-free rate is 6% and the expected rate of return on the market is 12%. (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Based on CAPM,
Expected return on stock = Risk free rate + Beta * (Expected market return - Risk free rate)
9% = 6% + Beta * (12% - 6%)
3% = Beta * 6%
Beta = 3%/6%
Beta = 0.50
A stock has an expected return of 9%. What is its beta? Assume the risk-free rate...
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