CAPM and Expected Return. The following table shows betas for several companies. Calcu$-$

late each stock's expected rate of return using the CAPM. Assume the risk$-$free rate of interest

is $4\%.$ Use a $7\%$ risk premium for the market portfolio. $($LO$12-2)17.$ CAPM and Expected Return. The following table shows betas for several companies. Calculate each stock$$s expected rate of return using the CAPM. Assume the risk$-$free rate of interest

is $4\%.$ Use a $7\%$ risk premium for the market portfolio. $($LO$12-2)$

Company Beta

Caterpillar $0\mathrm{.}98$

Apple $1\mathrm{.}35$

Johnson & Johnson $0\mathrm{.}69$

Consolidated Edison $0\mathrm{.}13$