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(hu) Calculate beta for the stock below. Would you buy or sell this stock if the risk free rate is 4% and the market risk
(hu) Calculate beta for the stock below. Would you buy or sell this stock if the risk free rate is 4% and the market risk premium is 8%? The allocation of points: the expected rate of return, the standard deviation, the covariance, the correlation coefficient, the beta, and the buy/sell recommendation are worth 1 point each. (6 points) Probability Stock 1 Market Risk& Return Recession 0.2 13% -10% Av. 0.45 9% 17% Boom 0.35 15% 34%
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