A stock has a beta of 1.68, the expected return on the market is 14.72, and the

Question

A stock has a beta of 1.68, the expected return on the market is 14.72, and the risk-free rate is 4.65. What must the expected return on this stock be? Answer 15.67 percent 16.75 percent 17.10 percent 18.46 percent 21.57 percent

A stock has a beta of 1.68, the expected return on the market is 14.72, and the risk-free rate is 4.65. What must the expected return on this stock be? Answer 15.67 percent 16.75 percent 17.10 percent 18.46 percent 21.57 percent

A stock has a beta of 1.68, the expected return on the market is 14.72, and the risk-free rate is 4.65. What must the expected return on this stock be? A stock has a beta of 1.68, the expected return on the market is 14.72, and the risk-free rate is 4.65. What must the expected return on this stock be? 15.67 percent 16.75 percent 17.10 percent 18.46 percent 21.57 percent

15.67 percent 16.75 percent 17.10 percent 18.46 percent 21.57 percent

Explanation / Answer

Return = 4.65 + 1.68*(14.72-4.65) = 21.57 %

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