Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A stock has an expected return of 13 percent, its beta is 1.25, and the expected return on the market is 11 percent. What must

A stock has an expected return of 13 percent, its beta is 1.25, and the expected return on the market is 11 percent. What must the risk-free rate be?

a) 2.85%

b) 3.00%

c)-0.75%

d)3.12%

e)3.15%

show how to get risk-free rate

Thanks

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management EMEA Theory And Practice

Authors: Michael Ehrhardt, Roland Fox, Eugene Brigham

2nd Edition

1473760216, 9781473760219

More Books

Students also viewed these Finance questions

Question

Discuss the roles of metacognition in learning and remembering.

Answered: 1 week ago

Question

Aware of differences in the role of employees unions.

Answered: 1 week ago