According to the capital asset pricing model, the required rate of return is found using the following equation
Required rate of return = Risk free rate + beta
Market risk premium
Required rate of return = 3.3 % + 1.3
5.1 %
Answer = 9.93
QUESTION 26 Vulcan Materials stock has a beta of 1.3. If the current risk free rate...
If you know the risk-free rate, the market risk-premium, and the beta of a stock, then using the Capital Asset Pricing Model (CAPM) you will be able to calculate the expected rate of return for the stock. True False
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1.
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