The rate on US Treasury securities is 2.1% and the expected return on the S&P 500 stock market index is 17.6%. Under the capital asset pricing model, what would be the expected return on a stock with a beta of 2.1? (Show your answer as a decimal to three places, e.g., if the answer is 12.3% input 0.123)

The rate on US Treasury securities is 2.1% and the expected return on the S&P 500 stock market index is 17.6%. Under the capital asset pricing model, what would be the expected return on a stock with a beta of 2.1? (Show your answer as a decimal to three places, e.g., if the answer is 12.3% input 0.123)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 20P

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