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A stock a beta of 1.2 and the standard deviation of its return is 25%. The market risk premium is 5% and the risk-free rate
A stock a beta of 1.2 and the standard deviation of its return is 25%. The market risk premium is 5% and the risk-free rate is 4%. A) What is the expect return for the stock? B) What are the expected return and the standard deviation for a portfolio that is equally invested in the stock and the risk-free asset? C) A financial analyst forecasts a return of 12% for the stock. Would you buy it? Why or why not
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