Given a risk-free rate of 3.2%, a market return of 12.7%, and a beta of 1.1,...
Given a risk-free rate of 3.2%, a market return of 12.7%, and a beta of 1.1, what is the expected return of the stock? Enter your answer as a percentage. Do not put the percentage sign into your answer.
Enter your response below.
%
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Homework Answers
Expected return of the stock = Risk-free rate + Beta(Market return - Risk-free rate)
Expected return of the stock = 0.032 + 1.1(0.127 - 0.032)
Expected return of the stock = 0.1365 or 13.65%
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