Question

What is the expected rate of return for a stock that has a beta of 1 if the expected return on the market is 13%?A. 15%.B. More than 15%.C. Cannot be determined without the risk-free rate.

Answer 1

Answer:

13%

Explanation:

If the beta is one, it means that the stock moves in line with the market, so expected return of the stock would be = 1 x 13% = 13%