contestada

consider the capm. the risk-free rate is 3%, and the expected return on the market is 15%. what is the expected return on a stock with a beta of 1.2?

Respuesta :

17.4% is the expected return on a stock.

Expected return=risk free rate+beta*(market rate-risk free rate)

=3+1.2*(15-3)

which is equal to

=17.4%

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