QUESTION 1: \ A stock has an expected return of 14 percent, its beta is 1.60,...

Question

Question

QUESTION 1:

A stock has an expected return of 14 percent, its beta is 1.60, and the risk-free rate is 4.8 percent. What must the expected \

Answer 1

Answer #1

expected return = risk free rate + beta * (market return - risk free rate)

=>

14% = 4.8% + 1.6 * (market return - 4.8%)

=>

market return

= 10.55%

Answer 2

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