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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)
State of economy Probability Rate of returns 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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