Question
Bonio Industry has a beta of 2.5 and a standard deviation of returns of 20%. The return on the market portfolio is 15% and the
Bonio Industry has a beta of 2.5 and a standard deviation of returns of 20%. The return on the market portfolio is 15% and the risk free rate is 4%. According to CAPM, what is the required rate of return on Bonio's stock?
A. 31.5%
B. 23.5%
C. 26.5%
D. 37.5%
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Financial Management For Decision Makers
Authors: Peter Atrill
7th Edition
129201606X, 978-1292016061
