Question
You have been hired as a financial analyst and given the following data: Stock Beta Expected return A 1.25 12% B 0.75 17% C 0.50
| You have been hired as a financial analyst and given the following data: | ||||
| Stock | Beta | Expected return | ||
| A | 1.25 | 12% | ||
| B | 0.75 | 17% | ||
| C | 0.50 | 9% | ||
| Market | 1.00 | 12% | ||
| The expected risk-free rate is 3% Required: 1. Define: risk, return 2. Discuss the type of risks 3. Find the required return for each stock, 4. What action do you recommend for each stock, explain? | ||||
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Understanding Housing Finance
Authors: Peter King
2nd Edition
0415432952, 978-0415432955
