Treasury bill yield (Risk free rate)=6%
Stock beta =1.5,
Expected yield of stock=18%
Expected as per CAPM = Risk free rate + (Beta*(Market Return-Risk
free rate))
18% = 6% +(1.5*(Market Return or Expected yield -
6%))
12% = 1.5*Market Expected yield -9%
21%= 1.5*Market Expected yield
Market Expected yield= 21%/1.5= 14.00%
Answer is c 14%
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