A stock has a beta of 1. 18. The risk free rate is 1964% and the market risk premium is 5%. What is the fair return on the stock?

Formula: Expected return = Risk free return + (Beta X Market Risk Premium)

Answered: A stock has a beta of 1 18. The risk…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 3P: Suppose that the risk-free rate is 5% and that the market risk premium is 7%. What is the required...

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Similar questions

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The standard deviation of stock returns for Stock A is 40%. The standard deviation of the market return is 20%. If the correlation between Stock A and the market is 0.70, then what is Stock A’s beta?
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A stock has a beta of 1 18. The risk free rate is 1964% and the market risk premium is 5% What is the fair return on the stock?