Question
Problem 12-17 CAPM and Expected Return (LO2) Stock A has a beta of .2, and investors expect it to return 3%. Stock B has a
Problem 12-17 CAPM and Expected Return (LO2)
| Stock A has a beta of .2, and investors expect it to return 3%. Stock B has a beta of 1.8, and investors expect it to return 11%. Use the CAPM to calculate the market risk premium and the expected rate of return on the market. (Do not round intermediate calculations. Enter your answers as a whole percent.) |
| Market risk premium | % |
| Expected market rate of return | % |
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Financial Management Principles And Practice
Authors: Timothy Gallagher
6th Edition
1930789157, 978-1930789159
