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wolverine [178]
3 years ago
11

What is the meaning of rebulosyon??

Advanced Placement (AP)
1 answer:
Savatey [412]3 years ago
6 0
Revolution or rebellion
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Stock Y has a beta of 1.0 and an expected return of 12.4 percent. Stock Z has a beta of .6 and an expected return of 8.2 percent
Harlamova29_29 [7]

Answer: 1.9%

Explanation:

First derive the Market return as this is needed in the Capital Asset Pricing Model by using the same model:

Required return = Risk free rate + Beta * ( market return - Risk free rate)

Using stock Y:

12.4% = Risk free rate + 1 * (market return - Risk free rate)

12.4% = Rf + market return - Rf

Market return = 12.4%

Use this to calculate the Risk free rate:

Stock Z:

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