Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the single-index model. The alpha of a stock is 2.00%. The return on the market index is 12.00%. The risk-free rate of return is

Consider the single-index model. The alpha of a stock is 2.00%. The return on the market index is 12.00%. The risk-free rate of return is 6.50%. The stock earns a return that exceeds the risk-free rate by 5.50%, and there are no firm-specific events affecting the stock performance. What is the beta of the stock? (Round your answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Finance questions