What is the required return using the capital asset pricing model if a stock's beta is...
What is the required return using the capital asset pricing model if a stock's beta is 1.2 and the individual, who expects the market to rise by 11.2%, can earn 4.4% invested in a risk-free Treasury bill?
Homework Answers
Ans 12.56%
| Required Return = | Risk free Return + (Market Return - Risk free return)* Beta |
| Required Return = | 4.4% + (11.2% - 4.4%)*1.2 |
| Required Return = | 12.56% |
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