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9. The common stock of Jensen Shipping has an expected return of 14.7 percent. The return...

9. The common stock of Jensen Shipping has an expected return of 14.7 percent. The return on the market is 10.8 percent and the risk-free rate of return is 3.8 percent. What is the beta of this stock?

=1.56

-Please check the answers and show all work typed out. No excel or grid style please as I am on mobile.

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Answer #1

CAPM formula

Expected Return= Risk Free Rate + Beta (Return on Market - Risk free rate)

0.147=0.038+ Beta(0.108-0.038)

Beta= 0.109/0.07

Beta = 1.56

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