A stock has a beta of 0.95, the expected return on the market is 21 percent, and the risk-free rate is 4.00 percent. What must the expected return on this stock be? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
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ANSWER
Calculation of the Expected Return on this Stock:
=Rf+beta (ERm-Rf)
=4%+0.95(21%-4%)
Expected Return =20.15%
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