The risk free rate on Treasury bill is 2%. The annual rate of return onn the...
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The risk free rate on Treasury bill is 2%. The annual rate of return onn the DowJones market index is 7%. You are considering a stock with a beta that is 30% more volatile than the overall market beta. What is the minimum level of annual return that you would require on this investment? Choose one of the following
A) 5.5%
B) 2%
C) 8.5%
D) 6.5%
E) 5%
Homework Answers
Minimum level of annual return that you would require on this investment:-
=Rf rate+beta*risk premium
=2%+1.3*(7%-2%)
=8.5%
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The risk free rate on Treasury bill is 2%. The annual rate of
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