Question

The common stock of Xiang Estates has an expected return of 13.3 percent. The expected return on the market is 10 percent, the inflation rate is 1.4 percent, and the risk-free rate of return is 1.3 percent. What is the beta of this stock?

Answer 1

The beta of the common stock of Xiang Estates given the expected return, expected market rate of teturn and risk free rate is 1.24.

What is the beta?

Beta is used to measure systemic risk. Systemic risk is the risk that cannot be diversified away. The higher beta is, the higher systemic risk is and the lower beta is, the lower systemic risk is.

Beta = (expected return - risk free rate) / market premium

(13.3 - 1.3) / ( 10 - 1.3) = 1.24

To learn more about beta, please check: https://brainly.com/question/15683560

#SPJ1