The common stock of Up-Towne Movers is selling for $33 a share and has a beta...
The common stock of Up-Towne Movers is selling for $33 a share and has a beta of 1.25. If the CAPM expected return is 15.5% and the market risk premium is 10.0%, what is the risk free rate of return?
Group of answer choices
2.0% 3.0% 12.5% 13.5%
Homework Answers
Expected rate=risk free rate+Beta*market risk premium
15.5=risk free rate+(1.25*10)
risk free rate=15.5-12.5
=3%
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