he table below shows information for 3 stocks. Security Beta Risk-free rate Expected market return Stock 1 1.9 0.02 0.09 Stock 2 1.2 0.035 0.09 Stock 3 0.2 0.015 0.09 The risk-free rates are different because they were measured in different years. Calculate the expected (or required) return for each stock, using the Capital Asset Pricing Model (CAPM). What is the required return for stock 1? What is the required return for stock 2? What is the required return for stock 3?
he table below shows information for 3 stocks. Security Beta Risk-free rate Expected market return Stock 1 1.9 0.02 0.09 Stock 2 1.2 0.035 0.09 Stock 3 0.2 0.015 0.09 The risk-free rates are different because they were measured in different years. Calculate the expected (or required) return for each stock, using the Capital Asset Pricing Model (CAPM). What is the required return for stock 1? What is the required return for stock 2? What is the required return for stock 3?
Chapter6: Risk And Return
Section: Chapter Questions
Problem 14P
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he table below shows information for 3 stocks.
| Security | Beta | Risk-free |
Expected market return |
| Stock 1 | 1.9 | 0.02 | 0.09 |
| Stock 2 | 1.2 | 0.035 | 0.09 |
| Stock 3 | 0.2 | 0.015 | 0.09 |
The risk-free rates are different because they were measured in different years. Calculate the expected (or required) return for each stock, using the
What is the required return for stock 1?
What is the required return for stock 2?
What is the required return for stock 3?
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