A stock has an expected return of 15.00%. The risk-free rate is 1.79% and the market...

Question

Question

A stock has an expected return of 15.00%. The risk-free rate is 1.79% and the market risk premium is 10.37%. What is the β of the stock?

Answer 1

Answer #1

Expected rate=risk free rate+Beta*market risk premium

15=1.79+10.37*Beta

Beta=(15-1.79)/10.37

=1.27(Approx).

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Answer 2

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