1. Beta= 0.50
2. 52 week change= 6.42%
3. S&P 500 52 week change= 39.13%
4. Use 1.2% for the Risk-free rate.
5. Use 10.9% for the Market rate. This is the 50-year average return for the S&P 500.
6. Using the information above (the stocks Beta, the risk-free rate, and the average return for the S&P 500) compute the required rate of return for your stock. In other words, plug these numbers into the CAPM model.

In your original post,

You are required to make only one recommendation either to Martin or to Samantha.

• Compare the required rate of return that you just computed with the actual 52-week change for the security. What do you notice?
• In your opinion, is this stock a good investment for Martin or Samantha? Why or why not? Please explain your answer.