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A stock has an expected return of 10.2%, the risk-free rate 4.1% and the market risk premium is 7.2%. Calculate the beta of this stock.

A stock has an expected return of 10.2%, the risk-free rate 4.1% and the market risk premium is 7.2%. Calculate the beta of this stock. (3 marks)

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Probability Rate of returns State of economy Boom Normal Bust 0.35 0.50 0.15 Stock A 0.24 0.17 0 Stock B 0.36 0.13 0.28 Stock C 0.55 0.09 0.45

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