Chapter 11, Problem 13QAP

Summary Introduction

Adequate information:

Expected return on the stock $\left({\text{ER}}_{\text{S}}\right)$ = 0.104

Expected market return on the stock $\left({\text{ER}}_{\text{M}}\right)$ = 0.07

Risk-free return on the stock $\left({\text{R}}_{\text{f}}\right)$ = 0.038

To compute: Beta of the stock

Introduction: Beta of the stock refers to the systematic risk of the stock.