A stock has an expected return of 15 percent. Its beta is 0.55, and the risk-free rate is 6.75 percent. What must the expected return on the market be? a. 22.84% b. 22.62% c. 15.00% d. 20.66% e. 21.75%

A stock has an expected return of 15 percent. Its beta is 0.55, and the risk-free rate is 6.75 percent. What must the expected return on the market be? a. 22.84% b. 22.62% c. 15.00% d. 20.66% e. 21.75%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 12P: Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average...

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Question

Financial accounting

A stock has an expected return of 15 percent. Its beta is 0.55, and
the risk-free rate is 6.75 percent. What must the expected return
on the market be?
a. 22.84%
b. 22.62%
c. 15.00%
d. 20.66%
e. 21.75%

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