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yan [13]
3 years ago
10

You are considering buying a stock with a beta of 3.05. If the risk-free rate of return is 8.0%, and the expected return for the

market is 18.0%, what should the expected rate of return be for this stock?
Business
1 answer:
elena55 [62]3 years ago
6 0

Answer:

38.5%

Explanation:

Rf = 8.0%

Rm = 18.0%

Beta = 3.05

RRR ?

from the given data the capital asset pricing model will be used to calculate the RRR

RRR = Rf + β (Rm - Rf)

        =8.0 + 3.05 (18.0-8)

         =38.5%

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