Final answer:
The beta of Exxon Mobil cannot be calculated without the market risk premium.
Step-by-step explanation:
The beta of a stock measures its sensitivity to market movements. It helps investors assess the level of risk associated with an investment. In this case, the beta of Exxon Mobil is given as 0.65, which means that the stock is less volatile compared to the overall market.
However, the risk-free rate mentioned as 4 is not sufficient to calculate the beta accurately. The risk-free rate is typically the yield on a risk-free investment, such as a government bond. Without the market risk premium, it is not possible to calculate the beta of Exxon Mobil. The formula to calculate beta is:
Beta = Covariance (Stock Returns, Market Returns) / Variance (Market Returns)