Suppose the risk-free rate is 5%, and the market risk premium is 8%. If a stock...
Suppose the risk-free rate is 5%, and the market risk premium is 8%. If a stock has a required rate of return of 15.25%, what is its beta? 1.25 1.35 1.15 1.28 None of the above
Homework Answers
Required return=risk free rate+beta*market risk premium
15.25=5+beta*8
beta=(15.25-5)/8
=1.28(Approx).
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