A stock has a beta of 1.21, the expected return on the market is 11.5 percent, and the risk-free rate is 4.7 percent. What must the expected return on this stock be? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Answer is complete but not entirely correct. Expected return 12.73 %

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A stock has a beta of 1.21, the expected return on the market is 11.5 percent, and the risk-free rate is 4.7 percent. What must the
expected return on this stock be?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Answer is complete but not entirely correct.
Expected return
12.73 %
Transcribed Image Text:A stock has a beta of 1.21, the expected return on the market is 11.5 percent, and the risk-free rate is 4.7 percent. What must the expected return on this stock be? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Answer is complete but not entirely correct. Expected return 12.73 %
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