A stock has a beta of 1.15, the expected return on the marker is 10.3 percent, and the risk-free rate is 3.1 percent. What must the expected return on this stock be?
As per CAPM |
expected return = risk-free rate + beta * (expected return on the market - risk-free rate) |
Expected return% = 3.1 + 1.15 * (10.3 - 3.1) |
Expected return% = 11.38 |
A stock has a beta of 1.15, the expected return on the marker is 10.3 percent,...
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