Suppose the risk-free return is 5.6% and the market portfolio has an expected return of 11.9%...
Suppose the risk-free return is 5.6% and the market portfolio has an expected return of 11.9% and a standard deviation of 16%.
Johnson & Johnson Corporation stock has a beta of 0.33.
What is its expected return? The expected return is? (Round to two decimal places.)
Homework Answers
Expected Return = Risk free rate + ( return on market - risk free rate) *beta
=5.6% + ( 11.9% -5.6%) * 0.33
= 7.679%
Hence the correct answer is 7.68%
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