Use the Capital Asset Pricing Model (CAPM) to calculate the required rate of return for a S&P 500 stock

of your choice.You must include the formula and parameters you used to calculate the answer.See below for instructions on how to find the numbers to plug into your equation:

• For the risk-free rate of return, use the latest long-term US Treasuries composite (>10 years), which can be found here.
• (Links to an external site.)
• Links to an external site.
• Base the expected market return on the 10-Year Trailing Total Returns (on the Daily tab - under 10-year) return of the S&P 500, which can be found here
• Determine beta for your stock usingYahoo Finance.

(or any other source you'd like). Enter the stock ticker in thesearch field at the top of the home page, and then look Beta under the summary section.

(Assume that nonsystematic risk - also known as unsystematic, specific, and diversifiable risk - is zero.)

Hint: The expected market return minus the risk-free rate equals the risk premium in the CAPM equation.