Question

Determine the beta coefficient for a stock with a return of 10%, risk free rate of 3% and the market return of 9%.

Answer 1

Answer: 1.167

Explanation:

From the question, we are informed to calculate the beta coefficient for a stock with a return of 10%, risk free rate of 3% and the market return of 9%. This would go thus:

Beta = (stock return - riskfree rate) / (market return - riskfree rate)

= (10% - 3%) / (9% - 3%)

= 7% / 6%

= 0.07 / 0.06

=1.167