Question
Company X has a beta of .85, the risk-free rate of return is 1%, and the average return on the market is 9%. (1) Calculate
Company X has a beta of .85, the risk-free rate of return is 1%, and the average return on the market is 9%. (1) Calculate the required rate of return on Company Xs stock. Show how you derive the answer. (2) Does Company Xs stock have greater risk, the same risk, or less risk than the average stock? Explain.
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The Oxford Handbook Of Hedge Funds
Authors: Douglas Cumming, Sofia Johan, Geoffrey Wood
1st Edition
0198840950, 978-0198840954
