The risk-free rate of return is 2.5 percent, and the market risk premium is 11 percent. What is the expected rate of return on a stock with a beta of 1.8?
Expected rate=risk free rate+Beta*market risk premium
=2.5+(11*1.8)
which is equal to
=22.3%
The risk-free rate of return is 2.5 percent, and the market risk premium is 11 percent....
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