14. Using CAPM (L01, 4) A stock has an expected return of 10.2 percent, the risk-free...

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14. Using CAPM (L01, 4) A stock has an expected return of 10.2 percent, the risk-free rate is 4.1 percent, and the market ris

business accounting

Answer 1

Answer #1

Expected rate=risk free rate+Beta*market risk premium

10.2=4.1+Beta*7.2

Beta=(10.2-4.1)/7.2

=0.8472(Approx).

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Answer 2

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