Compute the expected rate of return for Intel common stock, which has a 1.2 beta. The...
Compute the expected rate of return for Intel common stock, which has a 1.2 beta. The risk-free rate is 3.4 %, and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of 16%.
Homework Answers
as per CAPM expected rate of return :
risk free rate + beta *(market return - risk free rate)
=>3.4% +1.2*(16%-3.4%)
=>3.4+15.12
=>18.52%.
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