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Assume the risk-free interest rate is 7% and the market return is 12%. if the beta of a stock is 1.4, according to capm, what is the required rate of return on the stock?

Assume the risk-free interest rate is 7% and the market return is 12%. if the beta of a stock is 1.4, according to capm, what is the required rate of return on the stock?
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assume the risk-free interest rate is 7% and the market return is 12%. if the beta of a stock is 1.4, according to capm, what is the required rate of return on the stock?

User SuperFamousGuy
by
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1 Answer

2 votes

Answer:

  • Expected return = Risk Free Rate + [Beta x Market Return Premium]
User Marko Topolnik
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