The following factors were identified regarding Stock B. the stock sensitivity to each factor and the related risk premium associated with each factor were calculated as follows -          GDP- 0.8, RP 6% -          Inflation rate 1.4, RP=10.5 -          Gold Price 0.5, RP=6% -          Standard and Poor 500=1.2, RP=6% -          Risk free rate=6% What is the expected return of Stock B

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter5: Financial Options
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  1. The following factors were identified regarding Stock B. the stock sensitivity to each factor and the related risk premium associated with each factor were calculated as follows

-          GDP- 0.8, RP 6%

-          Inflation rate 1.4, RP=10.5

-          Gold Price 0.5, RP=6%

-          Standard and Poor 500=1.2, RP=6%

-          Risk free rate=6%

What is the expected return of Stock B

 

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